US Department of Justice Sues Apple Over Alleged iPhone Monopoly

Apple is facing a new antitrust lawsuit from the US Department of Justice, which is accusing the company of abusing its dominant position regarding app distribution on the iPhone. The government’s lawsuit claims that Apple’s walled garden on iOS allowed the company “to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.”

This lawsuit is the result of a long investigation that kicked off back in 2019 during Trump’s presidency. It later gained steam under the Biden administration, which has adopted a stronger stance regarding dominant tech giants. The lawsuit also mirrors other antitrust cases that Apple has been facing in recent months, with the EU Commission recently fining Apple $1.8 billion for abusing its position in music streaming.

The US DOJ’s case emphasizes that Apple’s anticompetitive practices on the iPhone are also affecting other industries including finance, fitness, gaming, entertainment, and more. “Unless Apple’s anticompetitive and exclusionary conduct is stopped, it will likely extend and entrench its iPhone monopoly to other markets and parts of the economy,” the lawsuit reads.

Whether Apple really has a “monopoly” with its iPhone can probably be debated: According to IDC, the company was the #1 smartphone manufacturer worldwide in Q3 2023 with a 24.7% market share. In North America, however, iPhones accounted for 62% of smarphone shipments in Q4 2023, according to data from Counterpoint Research. That number dropped to 30% in Europe, where Apple was followed closely by Samsung at 29%.

Speaking to the Wall Street Journal, an Apple spokesperson hinted that Apple was ready to defend itself against this latest antitrust challenge. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the Apple spokesman said.  “If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect.”

In Europe, the Digital Markets Act recently forced Apple to open up iOS and allow alternative app stores and payment methods. The company even announced more concessions to ensure compliance with the DMA, such as allowing iOS users in the EU to download apps directly from a website. While these changes are currently only available in Europe, it will be interesting to see if this latest legal challenge will force Apple to loosen its grip on iOS in other parts of the world as well.