No Respite for Apple as Four More States Join Lawsuit Over Alleged Smartphone Monopoly

Apple is encountering intensifying legal battles as four additional U.S. states have aligned with the federal government’s antitrust lawsuit, alleging monopolistic practices within the smartphone market. Indiana, Massachusetts, Nevada, and Washington have formally joined the Justice Department’s civil case against Apple, according to a statement released by the agency.

The initial complaint, filed in March, originated from 15 states and the District of Columbia. It accused the tech giant of leveraging its dominance to extract higher profits from consumers, developers, content creators, and businesses within its ecosystem. Central to the argument was the contention that iPhones are sold at prices as high as $1,599, with Apple’s profit margins surpassing those of its competitors. The objective of the lawsuit is to dismantle Apple’s control and “restore competition,” purportedly leading to lower prices and increased innovation.

The Justice Department outlined five instances where Apple allegedly enforces restrictive contracts and obstructs crucial access, actions deemed to unlawfully stifle competition and innovation. These areas include super apps, cloud streaming games, messaging apps, smartwatches, and digital wallets. Prosecutors argue that these monopolistic practices enable Apple to impose steep prices for iPhones while burdening partners with concealed fees.

A disclosed email from the late founder Steve Jobs has also emerged in the lawsuit, in which he expressed intentions to “force” developers into utilizing Apple’s payment systems to cement their allegiance to its ecosystem.

Apple vehemently rebuffed the monopoly allegations, asserting that it “faces fierce competition from well-established rivals.” The company further contended that the DOJ’s case hinges on a novel “theory of antitrust liability that no court has recognized.”

This legal skirmish represents a significant escalation in the tech industry’s confrontations with regulators and competitors over alleged anticompetitive conduct. While Apple has previously encountered investigations and directives, particularly in Europe regarding App Store policies, this lawsuit within the U.S. strikes at the heart of its operational framework.

Apple isn’t alone in grappling with antitrust litigation; U.S. authorities have intensified scrutiny on Big Tech after years of relatively lax oversight. Companies like Google and Amazon are also under increased regulatory pressure.

The last time such aggressive action was taken from Washington dates back to the early 1990s during the landmark United States v. Microsoft Corp. case, ultimately resolved in the early 2000s.

Apple now finds itself squarely targeted, partly due to longstanding concerns surrounding its “walled garden” strategy of tightly controlling its devices and platforms.