Uncle Sam is taking Apple to court — claiming they have a monopoly on the smartphone business and that the interconnected nature of their products is a little too anti-competitive.
The Dept. of Justice filed a federal lawsuit against Tim Cook’s company Thursday, which makes a lot of allegations against the tech giant … including that their whole business model is inherently gatekeeping, and has a stranglehold on the industry.
In the docs, obtained by TMZ, the feds say the ecosystem of all things Apple — including the iPhone, their Apple Watch and other apps and features connected to Apple’s mainframe — has created a “moat” that’s unfairly shutting out rival companies and their own customers.
The lawsuit states, “For many years, Apple has built a dominant iPhone platform and ecosystem that has driven the company’s astronomical valuation. At the same time, it has long understood that disruptive technologies and innovative apps, products, and services threatened that dominance by making users less reliant on the iPhone or making it easier to switch to a non-Apple smartphone.”
The feds add … “Rather than respond to competitive threats by offering lower smartphone prices to consumers or better monetization for developers, Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives. It has deployed this playbook across many technologies, products, and services, including super apps, text messaging, smartwatches, and digital wallets, among many others.”
In addition to their products — which the feds allege are created to work only within Apple’s system — the suit claims Apple has gone out of its way to shut down apps/programs people have attempted to use to make communicating on iPhones easier with non-iPhone products. Essentially, they’re alleging Apple has made it impossible to interact with Apple products/users if you’re not also using an Apple product … and they say that violates federal law.
The lawsuit also says this … “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly … This anticompetitive behavior is designed to maintain Apple’s monopoly power while extracting as much revenue as possible.”
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Apple has a massive market cap — with a valuation of $2.68 trillion, one of the largest on the map.