The U.S. Justice Department has launched an antitrust lawsuit against Apple (AAPL), accusing the company of having an illegal monopoly in the smartphone market and using predatory practices to retain its dominant position.
“Apple has locked its consumers into the iPhone while locking its competitors out of the market,” said U.S. Deputy Attorney General Lisa Monaco in announcing the legal action.
Apple called the lawsuit “wrong on the facts and the law” and said it “will vigorously defend” itself.
Practices of Apple that the Justice Department says are anticompetitive include the ways in which the company diminishes the functionality of non-Apple smartwatches, limits access to contactless payments for third-party digital wallets, and refuses to allow its iMessage app to exchange messaging with competing platforms.
The lawsuit against Apple, filed with 16 state attorneys general, is the latest example of aggressive antitrust enforcement by the U.S. government.
In recent years, the Justice Department has filed antitrust cases against Alphabet (GOOG / GOOGL) and Amazon (AMZN).
The government says it is trying to make the technology sector more fair, innovative, and competitive.
The latest antitrust case seeks to dismantle the way Apple’s hardware and software work together seamlessly on the company’s electronic devices that include the iPhone, iPad, and Apple Watch.
Apple said in a statement that if the government’s lawsuit succeeds, it will “set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
The stock of Apple fell 4% on news of the U.S. Justice Department’s lawsuit. The company’s share price is now down 8% on the year at $171.37 U.S. per share.
