Assistant Attorney General Jonathan Kanter Delivers Remarks on Lawsuit Against Apple for Monopolizing Smartphone Markets

Remarks as Prepared for Delivery

Thank you, Attorney General Garland, Deputy Attorney General Monaco and Acting Associate Attorney General Mizer.

The Justice Department has an enduring legacy of taking on the biggest and toughest monopolies in history. This includes historic cases against Standard Oil, AT&T, Microsoft and other modern-day monopolies. Today, we add to that distinguished legacy by announcing an antitrust lawsuit against Apple for monopolizing smartphones.

Approximately 25 years ago, the Justice Department and state Attorneys General announced a case against a different platform monopolist. That successful litigation and remedy created opportunities for the next generation of technologies, including — and especially — Apple.

Twenty-five years ago, it would have been difficult to imagine the innovation that would follow from the growth of mobile devices and services. That historic antitrust case, however, played a pivotal role in ushering the next generation of technologies. Apple itself was a significant beneficiary of that case. The remedy paved the way for Apple to launch iTunes, the iPod and eventually the iPhone free from anticompetitive restrictions, excessive fees and retaliation.

Today, we stand here, once again, to protect competition and innovation for the next generation of technology.

Smartphones have so revolutionized American life that it can be hard to imagine a world beyond the one that Apple, a self-interested monopolist, deems “good enough.” But under our system of antitrust laws, “good enough” is, quite simply, not enough.

The law mandates that competition — and not Apple’s self-interested business strategies alone — deliver innovation and choice. This is particularly important in areas of the economy that impact our daily lives. It is hard to think of a product that is more essential to our daily lives than smartphones.

Competition does not just protect the markets and technologies of today, but the innovations of tomorrow. We bring this case to make sure that Apple competes by innovating rather than by imposing rules and fees that prevent others from innovating and competing too. In so doing, we protect the market for the innovations that we can’t yet perceive.

Alongside our colleagues from the state Attorneys General, we have conducted a methodical, thorough and extensive investigation that has uncovered a pattern of anticompetitive conduct by Apple. Our lawsuit sets forth extensive facts and includes substantial excerpts from Apple’s own internal documents.

Our lawsuit lays out in detail Apple’s longstanding pattern of harmful anticompetitive behavior. And Apple has inflicted anticompetitive harm that is acute and substantial.

There is less competition to lower the price of smartphones for American consumers.

Meanwhile, consumers are paying more for digital goods, services and subscriptions.

Smartphone users are losing out on new, innovative and more secure features that could reduce the need for expensive hardware, unlock major technological advances and allow for more secure communications.

Developers, artists and content creators are paying hefty fees as Apple gains more control over the creation and distribution of content.

Banks and credit unions are now paying new credit fees for every tap-to-pay transaction initiated from an iPhone in retail stores and businesses. These fees will cost the economy billions of dollars.

Apple has long relied on contractual restrictions rather than competition on the merits to fortify its monopoly power.

And we know this because Apple’s internal documents tell us as much.

In 2010, a senior Apple executive emailed the then-CEO of Apple about an ad for the new Kindle e-reader. The ad began with a woman using her iPhone to buy and read books on the Kindle app. She then switches to using an Android smartphone and continues to read her books using the same app.

The senior executive expressed his concerns in candid terms: a “message that can’t be missed is that it is easy to switch from iPhone to Android. Not fun to watch.” 

Apple was clear in its response: it would “force” developers into using its payment system.

As we allege in our lawsuit, Apple repeatedly responded to competitive threats like this one and many others by making it harder to leave rather than making it more attractive to stay. The antitrust laws have something to say about that.

In closing, I would like to thank the unbelievably hardworking, dedicated, talented and extremely awesome staff of the Antitrust Division. They are exceptional public servants, and I am so proud to have them as colleagues.

I would also like to thank the attorneys general and their incredible hard-working teams from Arizona, California, Connecticut, District of Columbia, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont and Wisconsin.

Finally, I extend our deepest gratitude to the U.S. Attorney and his extraordinary team for District of New Jersey who join us in filing this important and historic case.