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DOJ files lawsuit against Apple, accusing tech giant of abusing power as a monopoly

ARI SHAPIRO, HOST:

Here in the United States, 1 in every 7 people owns an Apple iPhone. It is easily one of the most popular gadgets of our time. And today the Justice Department filed a blockbuster lawsuit accusing Apple of acting illegally to get that dominance. NPR tech correspondent Dara Kerr is covering this case. Hi, Dara.

DARA KERR, BYLINE: Hey.

SHAPIRO: What does the Justice Department accuse Apple of doing?

KERR: It's hard to overstate how headline-grabbing this case is. The Justice Department, along with 16 states and AGs, are saying Apple has illegally used monopoly power to edge out competitors when it comes to the iPhone. This is how Attorney General Merrick Garland spelled it out.

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MERRICK GARLAND: We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse.

KERR: Garland went on to say Apple is illegally dominating the smartphone market. He says that stifles innovation and threatens the free and fair market system, and this leads to increased costs for consumers. Just think of the price of an iPhone. The new ones are upwards of a thousand dollars. That's a lot of money, considering they have three-quarters of the market. The government says Apple flexes its muscle by making it nearly impossible for third-party developers to create apps and products across platforms. And it says that creates a crummy experience for people who want to use things like iMessage or Apple Pay, because only Apple can do that.

SHAPIRO: Well, apart from the green color of the text message bubble, when I message somebody who doesn't use an iPhone, can you give us an example of the kind of crummy experience the lawsuit talks about?

KERR: Yeah, well, the iPhone - iMessage in iPhone is a good example. If you're not an iPhone user, you're basically locked out of having a fun experience because you will not see those fun stickers like the heart or the thumbs up. And remember; this is a world that young people live in. The Justice Department says, when Apple designs its products this way, it basically locks people into what it calls the iPhone family, where people are reluctant to try other devices because all of their friends and family use the iPhone. Here's Deputy Attorney General Lisa Monaco.

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LISA MONACO: For years, Apple has tightened its grip on the smartphone market. It has done so not through product improvements, but by maintaining a chokehold on competition, locking its customers in to the iPhone while locking its competitors out of the market.

SHAPIRO: Well, how has Apple responded to this?

KERR: Unsurprisingly, Apple says this lawsuit is preposterous. Its main argument is that the reason the iPhone is the top-selling phone is because people love it, and the reason people keep buying it is because it's a superior product. Apple has also downplayed its market dominance by focusing on the global market, where its share is around 25% compared to the 70% in the U.S. But the iPhone is still the world's biggest seller. Apple says that the reason it has restrictions for app developers around its software and hardware is to make its iPhones more private and secure for consumers.

SHAPIRO: We've seen so much government activity targeting Big Tech recently. How does this fit into the broader picture?

KERR: Yeah. The Justice Department and the Federal Trade Commission have really brought a bunch of cases against Big Tech companies over the past few years. In the fall, the Justice Department went to trial with Google over its search engine, saying Google abused its monopoly power to dominate that market, and the FTC has sued both Amazon and Facebook. And all of these cases are similar to that big one that was against Microsoft in the late '90s. And the Justice Department won that one. So Apple now has 60 days to respond to this lawsuit, and the case is likely to play out over the next several years.

SHAPIRO: NPR's Dara Kerr. Thank you.

KERR: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Dara Kerr
Dara Kerr is a tech reporter for NPR. She examines the choices tech companies make and the influence they wield over our lives and society.