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US accuses Apple of monopolizing the smartphone market in a lawsuit

licesop | 2024-03-23 18:22:18 | 閲覧数: 16

The United States has initiated a significant legal action against Apple, alleging that the technology behemoth has established a monopoly in the smartphone industry and suppressed competition.

The justice department asserts in the legal proceeding that the firm engaged in the misuse of its authority over the iPhone app store with the intention of retaining customers and developers.

The corporation is accused of engaging in unlawful measures to obstruct apps perceived as a menace and diminish the attractiveness of competing products.

Apple has expressed its commitment to forcefully combat the lawsuit and refutes the allegations.

The extensive lawsuit, lodged in a federal court in New Jersey by the attorneys general of 16 states, represents one of the most significant obstacles faced by Apple thus far. Apple has been defending against an increasing number of complaints over its policies in recent years.

The statement posits that Apple employed a set of "shaping rules" and imposed limitations on the availability of its hardware and software, with the intention of enhancing its own financial gains, while simultaneously increasing expenses for consumers and impeding the progress of innovation.

During a news conference to announce the lawsuit, Attorney General Merrick Garland stated that Apple has sustained its monopoly in the smartphone market not just by outperforming competitors in terms of product quality, but also by contravening federal anti-trust legislation.

"Customers should not be subjected to increased prices due to companies' violation of the law."

The 88-page complaint centers its attention on five specific domains in which Apple purportedly engaged in power abuse.

As an illustration, the United States claims that Apple employed its app review procedure to obstruct the creation of super apps and streaming apps, as it was concerned that these programs would diminish the motivation for users to remain loyal to iPhones.

Additionally, it is stated that Apple has implemented measures to impede the integration of iPhones with smartwatches manufactured by competitors, as well as to restrict banks and other financial institutions from utilizing its tap-to-pay technology. These activities have enabled Apple to generate substantial revenue from the processing of Apple Pay transactions.

The complaint additionally centers on Apple's treatment of messages transmitted from competing devices, wherein they are differentiated by green bubbles and restricted in terms of movies and other functionalities. Apple's strategic actions have resulted in the emergence of a "social stigma," which has played a significant role in enabling the company to sustain its market dominance.

Apple stated that consumer loyalty stemmed from their satisfaction and that, according to US legislation, they had the freedom to select their business partners. The organization has cited privacy and security issues as a rationale for its regulations.

The corporation expressed its intention to petition the court for the dismissal of the litigation, which it anticipated would be unsuccessful.

"The company asserts that this lawsuit is erroneous in terms of both the facts and the law, and we will vehemently oppose it,"

According to Bill Baer, a visiting fellow at Brookings who served as an anti-trust official during the Obama administration, the outcome of the case will depend on the issue of motivation.

"Anti-trust laws and the courts' interpretation of them indicate that engaging in actions without a valid business justification, other than to restrict competition and solidify your monopoly, becomes problematic once you become a monopolist," he stated.

This marks the third instance of legal proceedings initiated by the United States government against Apple since 2009, and it represents the initial instance of an anti-trust lawsuit brought against the business under President Joe Biden's tenure.

In the event that the government prevails, it has the potential to compel Apple to completely revamp its existing contracts and procedures, or possibly result in the dissolution of the corporation.

Apple's stock experienced a decline of over 4% as investors analyzed the consequences of the legal dispute.

The realization of any prospective improvements would need a significant amount of time as the case progresses through the judicial system.

According to Rebecca Allensworth, a lecturer at Vanderbilt University, the case has been referred to as a "blockbuster" in light of previous legal actions initiated by the justice department against prominent technology corporations. Google, Meta, and Amazon are all confronted with comparable legal actions.

According to her statement, the fundamental objective was to enhance the functioning of smartphones and improve the accessibility of technology and software for both customers and other enterprises.

"The objective is not to dismantle Apple into smaller entities or separate its divisions," she stated.

The iOS environment and corporate practices of Apple have encountered an increasing legal opposition.

The company is currently involved in an extensive legal dispute with Epic Games, the creator of Fortnite.

The European Union imposed a fine of €1.8bn (£1.5bn) on it last month for violating competition regulations related to music streaming.

According to the European Commission, the company had implemented measures to prohibit streaming services from providing customers with information regarding payment alternatives beyond the Apple app store.

According to Margrethe Vestager, the competition commissioner, Apple has been engaging in the abuse of its dominating market position for a period of ten years. As a result, she has issued an order for the tech giant to eliminate all existing restrictions. Apple announced its intention to file an appeal based on the verdict.

According to Anat Alon-Beck, a professor of commercial law at Case Western Reserve University in Ohio, the recent case initiated by the justice department is significantly more comprehensive compared to its prior legal disputes within the European Union.

"The issue at hand extends beyond the 30% app store fee; it encompasses the fundamental unjust practices of Apple," she stated, emphasizing that it was not surprising that the Department of Justice (DOJ) took action.

Apple has a methodical approach to eliminate competitors from its ecosystem. According to the speaker, Apple's actions are negatively impacting several startup enterprises, stakeholders, customers, and, in her perspective, its stockholders.

As to the justice department, Apple holds a market share of over 70% in the US smartphone industry and over 65% in the overall smartphone market.

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