US, California sue Apple, alleging company monopolized smartphone market

John Bergmayer, legal director at the nonprofit public interest group Public Knowledge, applauded the lawsuit, calling it a crucial step toward restoring competition and boosting innovation in the mobile ecosystem.

“Consumers are paying the price for Apple’s abuse of its gatekeeper power — not just in higher smartphone prices, but in reduced innovation and a more limited, locked-down user experience,” Bergmayer said in a statement. “As the complaint describes, privacy and security do not justify Apple’s actions. Protecting users does not justify, nor require, anticompetitive and illegal conduct.”

“In fact, as the complaint alleges, Apple’s actions can harm the security and privacy of smartphone users, by putting obstacles in the way of secure, cross-platform messaging,” he said.

Thursday’s lawsuit is the latest lodged by U.S. officials against large technology companies. The government has also filed antitrust complaints in recent years against Amazon, Google and Meta.

This isn’t the first time Apple has faced scrutiny.

The Justice Department last sued Apple in 2012, accusing the company of colluding with book publishers to fix e-book prices. Apple was required to pay a $450 million settlement in the case.

Epic Games, the maker of “Fortnite,” sued Apple in 2020 alleging that the company violated federal law because it banned third-party app marketplaces on its operating system, requiring all developers to use Apple’s App Store. The dispute began after Apple booted “Fortnite” from the App Store because Epic had created a workaround to paying the 30% fee Apple collected from developers on customers’ in-app purchases.

A U.S. District judge ruled in that case that Apple didn’t maintain a monopoly in the market for mobile games, but ordered the company to permit developers to alert customers to different payment options outside the App Store.

Apple was also hit this month with a $2 billion penalty by the European Union following an investigation into allegations it prevented music streaming competitors, such as Spotify, from communicating with users about deals that could draw customers away from Apple’s App Store.

Although European regulators have focused largely on the company’s App Store, the U.S. government’s case is much more sweeping, taking aim at Apple’s entire menu of products and services.

Deputy Attorney General Lisa Monaco said that Apple has been working for years to tighten its hold on the smartphone market, shortchanging consumers.

“It has done so not through product improvements — but by maintaining a chokehold on competition — locking its customers in to the iPhone while locking its competitors out of the market,” Monaco said. “As a result ... Apple has gone from revolutionizing the smartphone market to stalling its advancement.”