Judge Rejects Apple’s Request to Dismiss Monopoly Lawsuit

Apple is facing similar challenges across the country and in Europe.

Reflections on a smartphone screen of logos of online platforms Google, Facebook, LinkedIn, Amazon, the Apple App Store, TikTok, and others, in this file photo. Photo by KENZO TRIBOUILLARD/AFP via Getty Images

A federal court rejected Apple’s motion to dismiss a Department of Justice (DOJ) lawsuit accusing the company of monopoly and anticompetitive conduct, according to a June 30 opinion issued by Judge Julien Xavier Neals from the U.S. District Court for the District of New Jersey.

The DOJ lawsuit, filed on March 21, 2024, with the backing of 16 states, alleged that Apple illegally cornered the smartphone market. The complaint alleged a wide range of illegal behavior, including putting restrictions on third-party apps, controlling messages sent by iPhones to other phones on its default messaging service, making the Apple Watch compatible with the iPhone, and controlling digital wallets and news services.

The lawsuit argued that Apple’s actions limit competition, thereby harming consumers, small businesses, and app developers.

“Consumers should not have to pay higher prices because companies violate the antitrust laws,” former Attorney General Merrick Garland said in a statement at the time. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”

On Aug. 1, 2024, Apple filed a motion to dismiss the complaint, arguing that the company has not “engaged in exclusionary conduct,” which is required to make monopoly claims under Section 2 of the Sherman Antitrust Act.

“The Supreme Court has made clear that a firm’s decisions about the terms on which it chooses to deal with third parties are not ‘exclusionary’ as a matter of law under Section 2,” Apple said.

“Forcing competitors to share their technology risks chilling the very innovation the Government claims to protect. And endorsing such a theory would require courts to oversee product-design and policy choices in dynamic technical markets, a task for which the Supreme Court has said courts are ill-suited.”

In the June 30 opinion, Neals said the DOJ lawsuit “adequately alleges” claims of monopolization.

Plaintiffs highlighted that Apple maintains a 65 percent share of the smartphone market, which the court said was enough to allege that the company maintains a “dominant share” in the market.

Plaintiffs claimed that restrictions placed on developers and other third parties on Apple’s platforms amount to technological barricades that constitute anticompetitive content, according to the opinion.

Apple’s argument, that it has the right to limit access to its own technology to third parties, is something that must be resolved at the discovery stage of the litigation, the court said.

For these and other reasons, Neals denied Apple’s request to dismiss the lawsuit.

The Epoch Times reached out to Apple for comment but did not receive a response by publication time.

Apple’s Legal Challenges

In addition to the DOJ lawsuit, Apple is facing multiple other legal challenges.

On April 30, District Judge Yvonne Gonzalez Rogers of the U.S. District Court for the District of Northern California accused the corporation of insubordination in a court case filed by game developer Epic Games.

Epic Games filed the lawsuit against Apple in August 2020 after getting removed from the Apple App Store for providing users with an alternative payment option.

In 2021, Gonzalez found Apple to be in violation of California’s unfair competition law and ordered the company to ensure that developers have the freedom to direct users to more payment options.

However, Apple was in “willful violation” of the 2021 order, Gonzalez said in her April 30 ruling.

“Apple willfully chose not to comply with this Court’s Injunction,” the judge wrote. “It did so with the express intent to create new anticompetitive barriers which would, by design and in effect, maintain a valued revenue stream; a revenue stream previously found to be anticompetitive. That it thought this Court would tolerate such insubordination was a gross miscalculation.”

Apple rejected the ruling.

“[The company] strongly disagrees with the decision,“ it said in a statement. ”We will comply with the court’s order and we will appeal.”

Meanwhile, Apple is facing heat in the European Union (EU) over similar issues. In April, the European Commission fined Apple 500 million euros ($590 million) for violating the region’s anti-steering obligations under the EU’s Digital Markets Act.

The commission accused Apple of imposing numerous restrictions that block developers.

On June 26, Apple announced several changes to its App Store policies in the EU, granting developers more options regarding selling digital goods and services outside of the company’s App Store.

The European Commission said it will assess these changes to determine whether Apple is in compliance with Digital Markets Act regulations.

“As part of this assessment, the commission considers it particularly important to obtain the views of market operators and interested third parties before deciding on next steps,” it said.