Apple: Department of Justice files suit

(CercleFinance.com) - The US Department of Justice announced on Thursday that it has decided to file suit against Apple, which it accuses of holding a monopoly position in the smartphone market.


In a press release, the DoJ states that its civil suit, supported by 16 attorneys general, concerns Apple's widespread exclusionary strategy.

According to the administration, this approach makes it harder for Americans to switch devices, undermines innovation in applications, products and services, and imposes extraordinary costs on developers, businesses and consumers alike.

Consumers should not have to pay higher prices because companies violate competition laws, said the Attorney General Merrick B. Garland.

We believe that Apple enjoys monopoly power in the smartphone market, not by having a substantive competitive advantage, but by violating federal antitrust laws, he added.

If things remain as they are, Apple will be able to continue consolidating its monopoly position, he concluded.

Following this news, Apple shares fell by 4% on Thursday in New York, posting the biggest drop on the Dow Jones index, as investors feared a lengthy procedure.

The DoJ's case is essentially based on the fact that Apple unfairly penalizes its rivals by preventing other technology players from having access to the hardware and software features of the iPhone, its flagship product", sums up Dan Ives, analyst at Wedbush.

This will not change the company's business model in the immediate future, but it does mean that Apple will have to find a way to settle this dispute amicably, pay a hefty fine and reach a compromise with developers regarding the App Store, he warns.


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