Key Takeaways:
Tech giant Apple is facing a wraith of lawsuits from consumers who accuse the company of using its position as a market leader to monopolize the smartphone industry. The suits come on the back of a sweeping antitrust case lodged against the iPhone maker by the US Department of Justice (DoJ) last week.
iPhone Customers Sue Apple for “Anticompetitive Conduct” by Inflating Prices
According to reports, three class action lawsuits have been filed since Friday in California and New Jersey federal courts by iPhone owners who claim that Apple inflated the cost of its products through “anticompetitive conduct”.
The lawsuit, seeking to represent millions of iPhone users worldwide, mirrors the Justice Department’s allegation that Apple violated the US antitrust law by suppressing technology for third-party messaging apps, digital wallets, cloud streaming games, and other items that would have increased competition in the market for smartphones.
In an 88-page suit filed in the US District Court for the District of New Jersey, the DoJ, along with 15 states claimed that Apple was illegally monopolizing the smartphone market and using its position to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, while restricting innovation in the field.
The Justice Department accused Apple of blocking the so-called “Super Apps”, which makes it easier for users to switch between smartphone platforms, effectively banning cloud streaming services for games, limiting the experience of cross-platform messaging apps, restricting the compatibility of non-Apple smartwatches with the iPhone, and barring third-party digital wallets from accessing the iPhone’s “tap-to-pay” feature.
Law firm Hagens Berman Sobol Shapiro, which filed one of the new consumer cases, said they had earlier sued Apple for allegedly thwarting competition for its Apple Pay wallet. Hegen Berman secured a combined $550 million as a settlement from the company in separate cases related to its app store policies and ebook pricing.
US Court Ruling and Europe’s DMA Force Apple to Allow Third-Party App Store on the iPhone
These lawsuits come on the back of Apple being forced by the EU to reevaluate many of its long-standing policies. Under the newly passed Digital Markets Act, the company is now required to support third-party app stores on iPhones in the EU and allow developers to access the iPhone’s tap-to-pay functionality.
US and European regulators warned the $2.7 trillion company that it could be broken up to restore healthy competition in the market.
Earlier this week, Microsoft, X, Meta Platforms, and Match Group filed an amicus brief in the ongoing Epic Games vs Apple case, protesting against the Cupertino-headquartered company’s decision to charge a hefty commission fee for payments made outside of its App Store.
The case stemmed in 2020 after Epic Games, developers of the popular cross-platform game Fortnite, sued Apple for violating antitrust law by requiring customers to download apps only through its App Store while charging developers up to 30% in commission on every purchase that was made.
The companies that develop some of the most popular apps for the iPhone, complained that excessive commission fees were harming both customers and them. With the US court ruling and the EU’s enactment of the DMA, Apple was forced to allow developers to process payments outside of its marketplace but put a levy of 27% on each transaction that was made.
Elon Musk-owned X stated in its filing that the new fee structure does not give app developers much incentive to link their apps to external payment methods. Microsoft complained that new App Store policies limit its ability to offer subscriptions and discounts to customers.
Apple has denied any wrongdoing in the allegations. The company makes a big chunk of its $400 billion-a-year revenue from selling iPhones. In 2023, Apple sold 232 million units of the smartphone, making up over 24% of the global market share.
More News: Apple And Google May Be Broken Up Into Separate Companies After Anti-Trust Cases In US and Europe
