U.S. Attorney General Merrick Garland (left) announces antitrust lawsuit against Apple on March 21, 2024, iPhones (AP Photo/Jeff Chiu, File)
The Department of Justice followed through on whispers its plans for a significant, upcoming antitrust legal action against Apple by announcing the lawsuit Thursday, claiming that the iPhone giant has broken the law by using its “monopoly power” to stay ahead of smartphone competition.
U.S. Attorney General Merrick Garland said stated that the DOJ, 15 states, and Washington, D.C., have joined in a New Jersey-based federal lawsuit that alleges Apple has violated § 2 of the Sherman Antitrust Act, which “prohibits monopolization or attempts at monopolizing any aspect of interstate trade or commerce.”
That offense, the law says, can subject Apple to a fine “not exceeding $100,000,000.”
“Apple has maintained monopoly power in the smartphone market not simply by staying ahead of the competition on the merits, but by violating antirust law,” Garland said, adding that the alleged anticompetitive conduct “hurts consumers” with higher prices and stifled innovation and hurts developers forced to compete on an uneven playing field.
Garland said Apple engaged in “exclusionary, anticompetitive conduct” by imposing “contractual restrictions and fees that limit the features and functionality that developers can offer iPhone users” and by “selectively restrict[ing] access to the points of connection between third-party apps and the iPhone’s operating system, degrading the functionality of non-Apple apps and accessories.”
According to the lawsuit, over the past decade-plus, Apple reaped the benefits of “a tax in the form of a 30 percent commission on the price of any app downloaded from the App Store, a 30 percent tax on in-app purchases, and fees to access the tools needed to develop iPhone native apps in the first place” — all while making it harder for users to ever abandon the iPhone.
“As Apple exercised its control of app distribution and app creation, Apple slowed its own iPhone innovation and extracted more revenue and profit from its existing customers through subscriptions, advertising, and cloud services. These services increase the cost of switching from the iPhone to another smartphone because many of these services—including its proprietary gaming, cloud storage, and news service—are exclusive to the Apple ecosystem, causing significant frictions for iPhone users who try to use alternative services on another smartphone,” the complaint said. “Moreover, Apple’s conduct demonstrates that Apple recognized the importance of digital products and services for the success of the iPhone while at the same time it restricted the development and growth of non-iPhone products and services—especially those that might make it easier for users to switch from the iPhone to another smartphone.”
In essence, Apple “consolidated” its monopoly power “not by making its own products better but by making other products worse,” Garland said. He mentioned “green text” messages — as opposed to the blue ones that iPhone to iPhone users will see — as an example of Apple “deliberately” lessening its own products’ “functionality” to hurt competition.
The attorney general mentioned that iPhone users may have experienced difficulty messaging non-Apple users due to Apple's actions, which includes reducing the functionality of its own messaging app and third-party messaging apps.
The attorney general added that the difference between a green text and a blue text can affect user privacy, despite most users being unaware of it.
The attorney general provided an example of how messaging a non-iPhone user in Apple Messages can result in limited functionality, including unencrypted text, pixelated videos, and the inability to edit messages or see typing indicators.
Deputy Attorney General Lisa O. Monaco emphasized that no company is above the law and asserted that Apple should be held accountable for dominating the iPhone market while excluding competitors.
Monaco expressed concern that Apple's actions have hindered the smartphone market's progress, affecting users, app developers, and the next generation of innovators. She also mentioned that 16 other attorneys general support the lawsuit against Apple.
The states, D.C., and the DOJ are now seeking legal action to declare Apple's actions unlawful monopolization or attempted monopolization of the smartphone market in America, aiming to prevent the company from engaging in anticompetitive practices.
Apple has vowed to vigorously fight the lawsuit. has called Apple has called the DOJ's case “wrong on the facts and the law.”