ARIZONA NEWS

Arizona joins federal lawsuit against tech giant Apple over alleged smartphone monopoly

Mar 21, 2024, 9:18 AM

iPhone 15 phones are shown during an announcement of new products on the Apple campus in Cupertino,...

The Justice Department and 16 attorneys general, including Arizona’s, filed an antitrust lawsuit Thursday, March 21, 2024, against Apple, accusing the tech giant of having an illegal monopoly over smartphones. (AP Photo/Jeff Chiu, File)

(AP Photo/Jeff Chiu, File)

PHOENIX – The U.S. Department of Justice and 16 attorneys general, including Arizona’s, filed a blockbuster antitrust lawsuit Thursday accusing tech giant Apple of illegally monopolizing the smartphone market.

“Apple has used its monopoly power to block competition, stifle innovation and extract higher prices from consumers,” Arizona Attorney General Kris Mayes said in a press release. “No company, even one as big as Apple, is above the law. Apple’s anticompetitive behavior has violated antitrust law and harmed consumers.”

Arizona is also part of a federal lawsuit filed in February to block the controversial merger of Kroger and Albertsons, two of the nation’s largest grocers.

The Apple lawsuit filed in federal court in New Jersey alleges that the tech giant uses its control over the iPhone to “engage in a broad, sustained, and illegal course of conduct.”

The attorney generals for New Jersey, California, Connecticut, District of Columbia, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin joined Arizona and the Justice Department as plaintiffs in the complaint.

Why is Apple facing an antitrust lawsuit?

The case takes direct aim at the digital fortress that Apple Inc., based in Cupertino, California, has 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.”

Apple has defended the walled garden as an indispensable feature prized by consumers who want the best protection available for their personal information. It has described the barrier as a way for the iPhone to distinguish itself from devices running on Google’s Android software, which isn’t as restrictive and is licensed to a wide range of manufacturers.

“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the company said in a statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”

But antitrust regulators see Apple’s walled garden most as a weapon to ward off competition, creating market conditions that enable it to charge higher prices that have propelled its lofty profit margins while stifling innovation.

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

The Associated Press contributed to this report.

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Arizona joins federal lawsuit against tech giant Apple over alleged smartphone monopoly