Apple shares tumble after US lawsuit over smartphone market monopoly
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More news: Shares in technology giant Apple fell 4.1% to US$171.37 ($260.78) overnight after the US Justice Department (DoJ) and 15 states launched court action against the iPhone maker, arguing the company used demand for its iPhone and products to hurt smaller rivals.
The DoJ is seeking to unwind Apple’s business model of charging users a premium for technology products where Apple dictates all details around how the device can be used.
US sues Apple for anticompetitive behaviour
The news: The US Justice Department and 15 states launched an action against Apple on Thursday, arguing the tech giant used demand for its iPhone and other products to hurt smaller rivals.
The numbers: According to the DoJ, Apple's share of the US performance smartphone market exceeds 70%, and its share of the entire US smartphone market exceeds 65%. The company currently has a market capitalisation of over USD2.6 trillion ($3.96 trillion).
The context: The DoJ’s complaint, filed in a New Jersey court, alleges that Apple is monopolising the market for smartphones, stifling innovation and the development of apps and related technology.
The Justice Department is seeking to unwind Apple’s business model of charging users a premium for technology products where Apple dictates all details around how the device can be used. The suit accuses Apple of making its product worse for consumers in order to block competitors, negatively affecting consumers and developers.
Antitrust regulators have also filed anti-monopoly suits against Amazon, Google and Meta, as officials work to stem the vast control of the huge tech players. Apple is currently being accused of anticompetitive behaviour by Epic Games in the Australian Federal Court.
What they said: Attorney General Merrick Garland said: “Consumers should not have to pay higher prices because companies violate the antitrust laws […] We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
