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The U.S. Justice Department Is Suing Apple in a Groundbreaking iPhone Monopoly Lawsuit — Here's Why Apple says that the lawsuit "threatens who we are" and, if successful, would limit its ability "to create the kind of technology people expect from Apple."

By Sherin Shibu

Key Takeaways

  • The U.S. Justice Department sued Apple on Thursday.
  • The agency alleges Apple has maintained its stronghold over the U.S. smartphone market by rigidly controlling how third-party companies interact with its products.
  • Apple responded that the lawsuit is "wrong on the facts and the law" and the company "will vigorously defend against it."

The U.S. Justice Department, along with 15 states and the District of Columbia, sued Apple on Thursday, accusing the tech giant of violating federal antitrust law and illegally using anticompetitive tactics to maintain a monopoly over the smartphone market.

"We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse," said U.S. Attorney General Merrick Garland at a press conference.

Garland pointed to the nearly $1,600 price tag for an iPhone (the iPhone 15 Pro Max) and its over 60% share of the U.S. smartphone market. The agency alleges that Apple has maintained its stronghold over the U.S. smartphone market not through merit alone, but by rigidly controlling how third-party companies interact with its products.

U.S. Attorney General Merrick Garland speaks at a news conference last year at the Justice Department. Photo by Anna Moneymaker/Getty Images

For example, Apple has historically allowed iPhone users to send high-quality photos and videos to each other through iMessage's distinct blue text bubbles, but limited Android phones to SMS standards and bright green text bubbles.

Related: Apple Shuts Down App That Let Android Users Send Blue-Bubble Texts to iPhones

Though Apple announced that it would make Android-to-iPhone communication smoother this year with a new standard called RCS, which Google also uses, non-iPhone users will still have green bubbles.

The clear color distinction between iPhone and Android users has made iPhones more cool among teenagers, according to the Wall Street Journal. Piper Sandler, a leading investment bank, found in October that 87% of teens own an iPhone and 88% expect the iPhone to be their next phone.

The DOJ accuses Apple of responding to competition by making it difficult and more expensive for customers to go outside of its ecosystem.

"Apple's conduct has resulted in less competition to lower the prices of smartphones for consumers," Assistant Attorney General Jonathan Kanter stated in the press conference.

Related: Apple Faces Class Action Lawsuit Over iCloud's Alleged 'Enormous Structural Advantage'

Apple also allegedly charges developers "hefty fees" that "will cost the U.S. economy billions of dollars," according to Kanter.

At the press conference, Garland responded to a question about iPhones potentially being flooded with unsafe apps by stating that the lawsuit did not target every kind of vetting that Apple does on the App Store — only exclusionary conduct.

Apple responded to the lawsuit by stating that it "threatens who we are" and would limit its ability "to create the kind of technology people expect from Apple."

"We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it," Apple said in a statement to CNN.

Apple is the largest tech company, by Statista estimates, to recently face antitrust complaints from the DOJ. Google historically went to trial last year over an ongoing DOJ federal antitrust case that accused the company of allegedly monopolizing search and search advertising. The DOJ scrutinized Google's relationship with Apple in the trial.

Related: Google Paid Apple Billions for Access to iPhone Users. Now the Partnership's Under Scrutiny in a U.S. Antitrust Lawsuit.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

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