Apple cannot escape an antitrust battle over the workings of its iPhone ecosystem. In the case that the U.S. government lodged against Apple Inc. last year, a federal judge in New Jersey has denied a bid by Apple to sidestep a sweeping lawsuit that accuses it of maintaining an illegal monopoly on the smartphone market. The ruling, handed down by Judge Julien Neals late last month, allows the Department of Justice and 20 state attorneys general to move forward with their claims that Apple has engaged in exclusionary practices that harm competition and innovation.
At the center of the case is Apple’s alleged abuse of control in the U.S. smartphone market. The plaintiffs claim that the tech titan has used its power over the iOS operating system, App Store, and proprietary hardware to block or degrade technologies that would increase interoperability or reduce consumer lock-in. Specifically, the March 2024 complaint identifies five areas where Apple allegedly suppressed cross-platform functionality: super apps, cloud streaming, messaging, smartwatches, and digital wallets.
In his opinion on June 30, Judge Neals held that the plaintiffs plausibly alleged that Apple maintains monopoly power in both the general smartphone market in the U.S. and the narrower “performance smartphone” submarket. The court found that Apple’s alleged market share – 65% and 70% in those respective markets – along with significant barriers to entry, such as high switching costs and technical restrictions, could support a finding of monopoly power.
The court rejected Apple’s key argument that its conduct amounted to a lawful “refusal to deal” – or a company’s right to decide with whom they will or will not do business. Instead, Judge Neals ruled that the alleged conduct went beyond mere non-cooperation and included affirmative restrictions – both technical and contractual – on developers and third-party hardware makers. For instance, the plaintiffs allege that Apple degraded the functionality of non-Apple smartwatches, blocked access to iPhone NFC hardware needed for tap-to-pay alternatives to Apple Pay and imposed onerous requirements on cloud gaming providers.
The ruling emphasized that these forms of conduct, taken together, plausibly constituted anticompetitive behavior aimed at protecting Apple’s market position by discouraging consumers from switching to competing smartphones.
The court allowed claims of attempted monopolization to proceed, as well. Judge Neals pointed to internal Apple communications cited in the complaint that allegedly reveal executives’ intent to preserve iPhone dominance by suppressing technologies that might lessen user dependency on Apple’s platform.
Apple has denied the allegations and is expected to continue vigorously defending its practices. But for now, the company must prepare to litigate one of the most consequential antitrust cases in recent tech history.
THE TAKEAWAY: The decision represents a significant win for antitrust enforcers. By allowing the case to advance past the motion-to-dismiss stage, the court signaled that Apple must now face discovery and potential trial on claims that strike at the core of its tightly integrated business model. The case joins a growing wave of scrutiny from regulators and legislators globally who are examining Big Tech’s control over digital markets.
The case is United States of America v. Apple Inc., 2:24‑cv‑04055 (D.N.J.).
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