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LOS ANGELES (CNS) - The U.S. Department of Justice, joined by California Attorney General Rob Bonta and a coalition of more than a dozen state attorneys general filed an antitrust lawsuit against Apple Thursday, alleging anticompetitive behavior related to iPhones and smartphones.
The lawsuit alleges Apple deliberately made it more difficult for third-party apps and products to operate with the iPhone, resulting in higher prices for consumers and harm to competition in the smartphone industry.
"Apple's anticompetitive conduct intentionally leaves consumers bearing the cost of sky-high smartphone prices at a time when smartphones are now essential to so much of our day-to-day lives. California's economy thrives on entrepreneurship, serving as a driving force behind its innovation and growth. Consumers, innovation, and the competitive process -- not Apple alone -- should decide what options consumers should have," Bonta said in a statement ahead of a planned late-morning news conference in downtown Los Angeles.
"In insulating itself from competition, Apple has caused harm to consumers and the market. This is illegal. I am proud to partner with the U.S. Department of Justice to send a clear message: We are committed to protecting consumers, holding industry accountable, and ensuring a fair and competitive market where the next generation of innovation can thrive."
Apple said in a statement that the lawsuit is "wrong on the facts and the law" and that the company would "vigorously" defend itself in court.
"This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets," according to the company. "If successful, it would hinder our ability to create the kind of technology people expect from Apple -- where hardware, software and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people's technology."
According to the lawsuit, Apple is accused of stifling innovation, limiting consumer choice, and making switching to other smartphones -- especially high-end performance smartphones -- unnecessarily difficult and expensive.
Apple is accused of violating the Sherman Antitrust Act by monopolizing and attempting to monopolize the smartphone apps market. The lawsuit alleges that Apple protects its monopoly by delaying, degrading, or outright blocking technologies that would bring competition by decreasing barriers to switching to another smartphone.
The lawsuit specifically alleges Apple:
-- degrades and undermines cross-platform messaging apps and rival smartphones, including introducing deliberate incompatibilities to prevent Android users from seamlessly sending messages to iPhone users;
-- makes it difficult for U.S. app developers to list "Super Apps," which have a broad array of functions and make it easier for consumers to switch from one phone manufacturer to another
-- blocks cloud gaming services on iPhones by historically refusing to list cloud gaming apps on the Apple App Store. Cloud gaming allows consumers to stream and play video games seamlessly across different devices independent of phone hardware;
-- limits basic functionality when consumers try to use third party cross-platform smart watches with iPhones; and
-- restricts digital wallet competitors by allowing only Apple Wallet access to the iPhone's "tap-to-pay" functionality.
Additionally, the lawsuit alleges Apple suppresses or delays apps, innovations, and technologies that would reduce switching costs or simply allow users to discover, purchase, and use their own accessories, apps and content without having to rely on Apple.
Bonta joined the U.S. Department of Justice and the attorneys general of Arizona, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin and the District of Columbia in filing the lawsuit.