Claiming that Apple has monopolized the smartphone market and crushed competition, the US has filed a historic lawsuit against the tech giant.
As part of the lawsuit, the US Department of Justice claims that Apple "locked in" users and programmers by abusing its monopoly on the iPhone app store.It claims the company broke the law to block applications that were deemed a danger and to devalue competing offerings.
Along with denying the allegations, Apple has promised to "vigorously" battle the case.
This massive lawsuit, which Apple and the attorneys general of sixteen states jointly filed in a New Jersey federal court, represents one of Apple's greatest obstacles thus far as it has been fighting off growing criticism of its business methods over the past few years.
It claims that in an effort to increase its own profits at the expense of consumers and innovation, Apple implemented "a series of shapeshifting rules" and limited access to its hardware and software.
Attorney General Merrick Garland stated at the press conference that the lawsuit had been announced that Apple had maintained its dominant position in the smartphone industry through violations of federal anti-trust legislation, in addition to remaining ahead of the competition on the merits.
"Customers should not have to pay higher prices because companies break the law."
Apple is accused of abusing its influence in five areas, according to the 88-page complaint.
When it comes to so-called super apps and streaming apps, for instance, the US claims that Apple obstructed their development through its app review process out of concern that they would make consumers less loyal to iPhones.
It goes on to argue that Apple has prevented other financial institutions from using its tap-to-pay technology and has made it hard for iPhones to connect to competing smartwatches, all of which increase Apple's billions in fees from Apple Pay.
Another point of contention is Apple's handling of messages received by competing phones, which involves marking them as "not from Apple" and restricting their ability to send videos and other content. It claims that Apple's actions have contributed to the creation of "social stigma" which has enabled the tech giant to retain its market dominance.
Apple maintained that its customers remained loyal due to their happiness and that it had the freedom to choose its commercial partners under US law. Its regulations have been rationalized by citing concerns about privacy and security.
It was anticipated that the lawsuit would fail, therefore the company indicated it would seek the court to dismiss it.
"We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it," according to the business.
According to Bill Baer, a former Obama administration anti-trust official and current visiting fellow at Brookings, the argument would center on the issue of motivation.
"Anti-trust laws and the courts' interpretation of them suggest that once you're a monopolist," according to him, "if you do engage in behaviours that have no legitimate business justification other than to limit competition and cement your monopoly, then that is problematic."
The US government has taken legal action against Apple three times since 2009, with the first of these being an anti-trust complaint brought against the business during President Joe Biden's administration.
If the government is successful, Apple may be compelled to change its contracts and procedures or maybe be forced to dissolve.
As investors pondered the consequences of the court dispute, Apple shares dropped by over 4%.
While the lawsuit is being heard in court, any possible adjustments would take a very long time to come to fruition.
Professor Rebecca Allensworth of Vanderbilt University dubbed the case "a blockbuster" in the wake of other lawsuits filed by the justice department against the big tech companies. Similar claims are being filed against Amazon, Meta, and Google.
According to her, the main idea was to make the technology and software more available to consumers and other businesses while also enhancing the functionality amongst cellphones.
"It's not about breaking up Apple into small units or spinning off divisions," according to her.
The legal resistance against Apple's iOS ecosystem and corporate strategies has been on the rise.
It has been in a protracted legal dispute with Fortnite developer Epic Games.
When it came to music streaming, the European Union fined it €1.8bn (£1.5bn) last month for violating competition laws.
According to the European Commission, the company had blocked streaming services from disclosing payment alternatives to customers outside of the Apple app store.
Apple was ordered by competition commissioner Margrethe Vestager to remove all limitations after she said the tech giant had exploited its dominant position in the market for a decade. Apple has stated its intention to challenge the ruling in court.
Case Western Reserve University of Ohio business law professor Anat Alon-Beck characterized the current action as "far more extensive" than the justice department's other legal battles in the EU.
She went on to say that the Department of Justice's intervention was long overdue, and that the issue at hand extended beyond the 30% app store fee to encompass Apple's fundamentally unfair business practices.
As a matter of policy, Apple does not include its competitors in the Apple ecosystem. She felt that Apple was betraying its shareholders, customers, stakeholders, and fledgling firms by taking that action.
The US justice department reports that Apple has a 70% share of the smartphone market in the US and a 65% portion of the global smartphone industry overall.