In its 88-page lawsuit, the DOJ accused Apple of repeatedly choosing “to make its products worse for consumers to prevent competition from emerging.”
Apple pushed back on the allegations.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” Apple said in an earlier statement to Business Insider’s Aaron Mok. “If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect.”
In the complaint, the DOJ highlighted how Apple had expanded beyond its personal-computing roots to dominate other industries.
“Apple is rapidly expanding its influence and growing its power in the automotive, content creation and entertainment, and financial services industries — and often by doing so in exclusionary ways that further reinforce and deepen the competitive moat around the iPhone,” the lawsuit alleged.
Here are three sectors where prosecutors say Apple engages in anticompetitive conduct.
1. Entertainment and news
The DOJ says Apple’s subscription services — including news, games, video, music, cloud storage, and fitness — tie users to iPhones, giving the tech powerhouse outsize leverage over content creation.
“These subscription services can also increase Apple’s power over content creators and newspapers, among others, by exerting control over how audiences access their work, decreasing traffic to their websites and apps, and positioning Apple as the middleman or tollbooth operator in the relationship between creators and users,” the DOJ alleged.
“In so doing, Apple takes on outsize importance and control in the creative economy, which may diminish incentives to fund, make, and distribute artistic expression,” it added.
2. Cars
The DOJ alleges that Apple is attempting to monopolize in-vehicle infotainment through its CarPlay phone-mirroring service as the tech company pushes its use beyond the central display.
“Apple has told automakers that the next generation of Apple CarPlay will take over all of the screens, sensors, and gauges in a car, forcing users to experience driving as an iPhone-centric experience if they want to use any of the features provided by CarPlay,” the lawsuit said.
“Here too, Apple leverages its iPhone user base to exert more power over its trading partners, including American carmakers, in future innovation,” it added.
The DOJ has also accused Apple of attempting to stifle the development of digital-key technologies by requiring that they be offered in the iPhone’s digital wallet, a proprietary product. Prosecutors say one company decided not to make a digital car key because the key couldn’t live in its own app — it had to be part of Apple Wallet.
3. Finance
Through Apple Wallet, Apple Card, and other products, Apple has expanded significantly into financial services. Apple Wallet can only be used on an iPhone, which prosecutors say creates a barrier for customers who’d like to switch to another smartphone.
The DOJ says banks are paying 0.15% for every Apple Pay transaction, a “significant expense” that Apple expects will generate almost $1 billion in revenue by next year. Neither Samsung nor Google, two of Apple’s major smartphone competitors, charge banks a fee.
Apple’s stock edged up 0.2% in after-hours trade after closing 4.1% lower at $171.37 apiece on Thursday.
