U.S. DoJ sues Apple, accusing it of monopolizing smartphone markets

The U.S. Department of Justice and 15 states on Thursday sued Apple as the government cracks down on Big Tech, alleging the iPhone maker monopolized the smartphone market, hurt smaller rivals and drove up prices.

"Consumers should not have to pay higher prices because companies violate the antitrust laws," Attorney General Merrick Garland said in a statement.

The Justice Department said that Apple charges as much as $1,599 for an iPhone and makes larger profit than any others in the industry. Officials also said Apple charges various business partners – from software developers to credit card companies and even its rivals such as Google – behind the scenes in ways that ultimately raise prices for consumers and drive up Apple's profit.

Apple denied the allegations made by the government.

"This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple."

White House assistant press secretary Michael Kikukawa said: "President Biden strongly supports fair and robust enforcement of the antitrust laws."

In the lawsuit, the U.S. accused Apple of making it harder for consumers to block competitors and cited five examples where Apple used mechanisms to suppress technologies that would have increased competition among smartphones: so-called super apps, cloud stream game apps, messaging apps, smartwatches and digital wallets.

For example, the U.S. alleges Apple made it more difficult for competing messaging apps and smart watches to work smoothly on its phones. It also alleges that Apple's app store policies around streaming services for games have hurt competition.

The Justice Department quoted an email chain from Steve Jobs, the Apple co-founder who died in 2011, saying that it was "not fun to watch" how easily consumers could switch from iPhones to Android phones and vowing to "force" developers to use its payment systems in an effort to lock in both developers and consumers.

In Europe, Apple's App Store business model has been dismantled by a new law called the Digital Markets Act that went into effect earlier this month.