Why the DOJ and 16 states are suing Apple in a landmark antitrust case

The Department of Justice and more than a dozen states sued Apple in a landmark antitrust case. They argue the tech giant created a monopoly in the smartphone market by using excessively restrictive hardware and apps that keep customers locked into Apple’s ecosystem, putting a “chokehold on competition.” Amna Nawaz discussed the case with Principal Deputy Assistant Attorney General Doha Mekki.
Amna Nawaz:
The Department of Justice and more than a dozen states sued Apple today in a landmark antitrust case. They argue that the tech giant has created an illegal monopoly in the smartphone market by using excessively restrictive hardware and apps that keep customers locked into Apple’s ecosystem and that puts a — quote — “choke hold” on competition.
That includes its payment and messaging systems and basic connections with other apps.
Doha Mekki is the principal deputy assistant attorney general at the department, and she joins me now.
Welcome to the “NewsHour.”
Doha Mekki, U.S. Principal Deputy Assistant Attorney General:
Hi, Amna. It’s nice to be with you.
Amna Nawaz:
So, the Department of Justice is arguing here that Apple’s monopoly comes at the expense of developers, of rival phone makers and also consumers. Tell us more about that. How specifically are consumers being harmed?
Doha Mekki:
Sure.
So, today’s lawsuit was filed about alleged monopolization, monopoly maintenance, to be specific, by Apple that we allege has artificially thwarted competition in the smartphone market. And, specifically, we allege that Apple imposed restrictions on apps, products and services that threaten to disrupt Apple’s smartphone monopoly.
And so consumers really suffer the consequences of that. Sometimes, that looks like higher prices for smartphones, including the iPhone. It looks like disrupted innovation by potential developers that harms the entire ecosystem for smartphones.
And it also means that Apple is thwarting technologies and emerging paradigms that may make consumers device-agnostic altogether.
Amna Nawaz:
So part of Apple’s response, as I’m sure you have seen, says the lawsuit threatens what they call the principles that set them apart in the market. Here is part of their response now.
They say:
“If successful, this lawsuit would hinder our ability to create the kind of technology people expect from Apple, where hardware, software and services intersect.”
Doha, as you know, part of the Apple appeal, what makes them so popular is that they have this integration across this suite of systems and apps. Everything just kind of works together. Is there a sense here that DOJ is punishing them for what customers like them best for?
Doha Mekki:
Absolutely not.
The United States is in favor of consumer electronics and products and services that work for consumers. And competition is the best way to make sure that there is ample opportunity in the market for different kinds of providers to offer more of what consumers want.
The United States government in its lawsuit is also very in favor of privacy and security. And, specifically, none of the conduct that we challenge in our lawsuit is necessary to ensure privacy and security.
Amna Nawaz:
So, part of the DOJ’s challenge here is to prove that the benefits Apple delivers to consumers don’t outweigh its alleged antitrust practices, right? How do you do that?
Doha Mekki:
So there will be many months of discovery and a long road to trial in this case, which we very much look forward to.
And one of the things that we will focus on is really developing a full record ahead of trial about all of the ways that Apple undertakes anticompetitive and exclusionary conduct. And, obviously, Apple will have an opportunity to put forward any alleged justifications for its conduct.
And it’s our burden to show that the exclusions and restrictions that they deployed in their App Store, through developer guidelines, et cetera, outweigh what’s required to deliver their products and services.
Amna Nawaz:
So if the lawsuit’s successful, what kind of changes could DOJ be looking Apple to make? Could you be looking at structural changes, for example, breaking the company up?
Doha Mekki:
So that’s really a legal question.
Our burden right now is to demonstrate an antitrust violation. And it is a black-letter law in the United States that a remedy really has to be tailored to redress the violation and prevent its recurrence. And so it’s too early right now to say what the precise contours of a remedy are.
But it is the role, the tradition and longstanding goal of the Justice Department to take on monopolies and pry open markets that have been encumbered by abuse of monopoly power and make sure that the forces of competition can take hold, so that we are protecting the opportunity for next-generation technologies and disruptive services and products that Americans have always looked forward to.
It’s about making sure that the next generation of Apples are allowed to take hold.
Amna Nawaz:
This lawsuit does follow years of regulatory scrutiny of Apple. We know they have already fought off a number of other antitrust challenges.
What prevented the DOJ from taking action sooner, action that might have saved some of the consumers, it says, were now harmed?
Doha Mekki:
This lawsuit was actually filed after a methodical, careful, and very deliberate investigation.
As you know, we take our cases and our facts as we find them. And we only file lawsuits when we are confident that we have real competition concerns that can’t be addressed short of going to court. And so that’s what happened here.
And so there’s no doubt justice delayed is justice denied, and we will be excited to try our case just as soon as it’s ready.
Amna Nawaz:
That is Doha Mekki, principal deputy assistant attorney general at the Department of Justice.
Thank you so much for your time.
Doha Mekki:
Thank you so much for having me.