PHOENIX — Arizona is joining a growing list of states and nations that are taking aim at Apple's purported monopoly stranglehold on the smartphone market.
Attorney General Kris Mayes announced on Thursday that she is joining the U.S. Justice Department and 15 other state and attorneys general in suing Apple for violating antitrust laws.
"Apple has used its monopoly power to block competition, stifle innovation, and extract higher prices from consumers," Mayes said in a press release. "No company, even one as big as Apple, is above the law."
The lawsuit accuses Apple of illegally maintaining a monopoly by imposing contractual restrictions on and withholding critical access points from developers. The suit claims that Apple uses its "monopoly power" to disrupt the development of cross-platform apps, suppress cloud-based streaming services, worsen the quality of cross-platform messaging and diminish the functionality of non-Apple smartwatches.
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Apple called the lawsuit “wrong on the facts and the law” and said it “will vigorously defend against it.”
President Joe Biden has called for the Justice Department and the Federal Trade Commission to vigorously enforce antitrust statutes. The increased policing of corporate mergers and business deals has been met with resistance from some business leaders who have said the Democratic administration is overreaching, but it’s been lauded by others as long overdue.
The case is taking direct aim at the digital fortress that Apple Inc., based in Cupertino, California, has assiduously built around the iPhone and other popular products such as the iPad, Mac and Apple Watch to create what is often referred to as a “walled garden” so its meticulously designed hardware and software can seamlessly flourish together while requiring consumers to do little more than turn the devices on.
The strategy has helped make Apple the world’s most prosperous company, with annual revenue of nearly $400 billion and, until recently, a market value of more than $3 trillion. But Apple’s shares have fallen by 7% this year even as most of the stock market has climbed to new highs, resulting in long-time rival Microsoft — a target of a major Justice Department antitrust case a quarter-century ago — to seize the mantle as the world’s most valuable company.
All of this comes on top of a $2 billion (1.8 billion euro) fine that European regulators slapped on Apple earlier this month after concluding that the company had undermined competition in the music streaming through the iPhone, despite Spotify being the leader in that market.
"Apple’s anticompetitive behavior has violated antitrust law and harmed consumers. Holding Apple accountable is critical to ensuring a competitive market where innovation can flourish and consumers can access a wide range of affordable products and services. Fair competition protects consumer choice and encourages innovation, leading to better products and services for everyone," Mayes said.
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