Apple Seeks Dismissal of US Lawsuit That Accuses iPhone Maker of Monopolising Smartphone Market

Apple refuted the allegation and said it faced fierce competition from well-established rivals.

By Reuters | Updated: 22 May 2024 16:20 IST

Apple Seeks Dismissal of US Lawsuit That Accuses iPhone Maker of Monopolising Smartphone Market

Photo Credit: Reuters

Apple rejected the government's contentions that the iPhone has kept consumers "locked in" to the devices

Highlights

Apple is accused of using market power to get more money from consumers
Officials also said Apple imposes hidden charges on business partners
The lawsuit says Apple hurt smaller rivals and drove up prices

Apple said on Tuesday it plans to ask a US judge to dismiss a lawsuit filed by the Justice Department and 15 states in March that alleged the iPhone maker monopolized the smartphone market, hurt smaller rivals and drove up prices.

In a letter to US District Judge Julien X. Neals in New Jersey, Apple said "far from being a monopolist, Apple faces fierce competition from well-established rivals, and the complaint fails to allege that Apple has the ability to charge supra-competitive prices or restrict output in the alleged smartphone markets."

In the letter to the judge, Apple said the DOJ relies on a new "theory of antitrust liability that no court has recognized."

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The government is expected to respond within seven days to the Apple letter, which the court requires parties to submit, hoping to expedite cases before advancing to a potentially more robust and expensive effort to dismiss a lawsuit.

The Justice Department alleges that Apple uses its market power to get more money from consumers, developers, content creators, artists, publishers, small businesses and merchants. The civil lawsuit accuses Apple of an illegal monopoly on smartphones maintained by imposing contractual restrictions on, and withholding critical access from, developers.

The Justice Department, which did not immediately comment, has previously said Apple charges as much as $1,599 for an iPhone and makes a larger profit than any rival. Officials also said Apple imposes hidden charges on various business partners - from software developers to credit card companies and even rivals such as Alphabet's Google, in ways that ultimately raise prices for consumers.

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Apple rejected the government's contentions that the iPhone has kept consumers "locked in" to the devices. "Someone unhappy with Apple's limitations has every incentive to switch to competitor platforms that ostensibly do not have those limitations," the letter said.

"Consumers should not have to pay higher prices because companies violate the antitrust laws," Attorney General Merrick Garland said in March. "If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."

Apple launched the iPad Pro (2022) and the iPad (2022) alongside the new Apple TV this week. We discuss the company's latest products, along with our review of the iPhone 14 Pro on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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