The United States Department of Justice has filed a lawsuit against Apple, alleging that the iPhone ecosystem has created a monopoly that boosts Apple's valuation while harming consumers, app developers, and other phone manufacturers.
The government has also raised the possibility of ordering Apple to be broken up. US officials have stated that they may consider forcing Apple to split its business if the prosecutor's lawsuit is successful in court.
The lawsuit filed by the US government claims that Apple implements anti-competitive business practices through the iPhone, Apple Watch, advertising, browsers, FaceTime, and other products.
"Every step taken by Apple builds and strengthens the smartphone monopoly," wrote the US government in the lawsuit filed in federal court in New Jersey, as quoted by CNBC International.
The US government rarely uses the Sherman Act, an anti-monopoly law that can be used to force private companies to split their businesses. The last time corporate breakup regulations were used was in 1982, to force the Bell System to split its business.
The US Department of Justice, in a press release, stated that Apple has cunningly forced consumers to continue buying iPhones by blocking cross-platform messaging apps, restricting third-party digital wallets, limiting the performance of Apple Watch with other phones, and making programs available outside the App Store run less smoothly on iPhones.
The US government's lawsuit could disrupt Apple's walled-garden business model, a closed platform for all its products. Apple itself stated that operating costs would soar if they were to comply with new regulations, making it difficult for them to introduce new products and services.
The primary target of the US government is Apple's most profitable business, the iPhone. Apple reportedly earned $200 billion from iPhone sales in 2023 alone.
US Attorney General Merrick Garland stated that the US Supreme Court defines monopoly power as "the power to control prices or eliminate competition."
"As stated in our lawsuit, Apple has such power in the smartphone market. If left unchecked, Apple will only strengthen its monopoly," said Garland.