The US Department of Justice, along with 16 attorneys general, has filed a significant antitrust lawsuit against tech giant Apple. The lawsuit, spanning 88 pages, accuses Apple of deliberately making its products inferior to stifle competition from emerging rivals. Apple has refuted these claims, stating that the lawsuit jeopardizes the core principles that differentiate Apple products in highly competitive markets.
The lawsuit sheds light on Apple's expansion beyond personal computing into industries such as automotive, content creation, entertainment, and financial services. The DOJ alleges that Apple's subscription services, covering news, games, video, music, cloud storage, and fitness, tether users to iPhones, granting Apple disproportionate control over content creation.
Furthermore, the lawsuit accuses Apple of attempting to monopolize in-vehicle infotainment through its CarPlay service, which aims to dominate car displays and features. Apple's insistence on integrating digital key technologies exclusively into its Apple Wallet has also drawn criticism for impeding innovation in this sector.
Apple's foray into financial services, exemplified by Apple Wallet and Apple Card, has raised concerns over market competition. The DOJ highlighted that Apple charges banks a fee of 0.15% for every Apple Pay transaction, a cost that is expected to yield nearly $1 billion in revenue by the following year. This fee structure contrasts with Apple's competitors, Samsung and Google, who do not impose similar charges on banks.
Despite the legal challenges, Apple's stock experienced a marginal increase of 0.2% in after-hours trading, following a 4.1% decline in regular trading hours to close at $171.37 per share.
