Apple shares fall almost 5% due to accusations of monopoly in the US smartphone market

The long-awaited lawsuit, filed in the United States District Court for the District of New Jersey, comes after years of accusations by critics that Apple has harmed competition with restrictive terms in its store of applications, high fees, and its “walled garden” approach to its hardware and software.

In that context, Apple shares fall almost 5% (-4.7%) in the session. This adds to the drop accumulated in the last month of -5.8%, while investors perceive that the firm is falling behind in the artificial intelligence race.

Apple is famous for making its technology easy to use, but it achieves that by closely monitoring, and in some cases, restricting how third-party companies can interact with the tech giant’s products and services.. In some cases, the Apple firm can give its own products better access and features than its competitors.

The company said it denied the lawsuit’s allegations and would appeal them, adding that the lawsuit could empower the government.”to take a heavy hand in designing people’s technology“.

Apple: the reaction to the lawsuit

“Monopolies like Apple threaten the free and fair markets on which our economy is based. They stifle innovation. They harm producers and workers and increase costs for consumers“Garland said Thursday.

“If allowed without challenge, Apple will only continue to strengthen its smartphone monopoly. But there is a law for that,” she added.

For example, Apple allows iPhone customers to seamlessly send high-quality photos and videos to each other, but multimedia messages to Android phones are slower and grainier. The company late last year relented and agreed to improve the quality standard it uses to interact with Android phones via text messages, but still keeps those messages in green bubbles, creating a kind of class divide, critics argue.

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Reuters

The company also gives its own products the ability to access certain parts of its hardware that it restricts other companies. This unlocks an almost magical experience of how iPhones interact with AirTags, when competitors’ products are much more limited in their capabilities.

This year, European regulations forced Apple to give other companies access to the iPhone’s pay-per-tap hardware chip, allowing the creation of competing digital wallets. But those rules are limited to the European Union.

“Consumers Shouldn’t Have to Pay Higher Prices Because Companies Violate Antitrust Laws“Garland said in the statement. The civil suit, backed by 15 states and the District of Columbia, accused Apple of using its dominance in the smartphone ecosystem to extract more money from consumers, developers, content creators, artists, publishers, small businesses and merchants.