The U.S. Department of Justice sued tech giant Apple on Thursday, alleging that the company had abused its power by preventing rivals from creating competing digital wallets and payments services, as well as by restricting access to the contactless payment functionality on its smart devices.
“Apple actively encourages banks, merchants and other parties to participate in Apple wallet, but it simultaneously exerts its monopoly power to block the same partners from developing alternative payment products and services for iPhone users,” U.S. Attorney General Merrick Garland said at a Thursday press conference.
The DOJ filed the lawsuit, along with 16 state attorneys general, in U.S. District Court in New Jersey. The complaint specifically cited Apple using “its own form of an interchange fee on banks” that increased the cost of using credit cards.
“Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others,” the DOJ said in a Thursday press release. “Through this monopolization lawsuit, the Justice Department and state Attorneys General are seeking relief to restore competition to these vital markets on behalf of the American public.”
Apple pushed back on the lawsuit, calling it “wrong on the facts and the law,” in an emailed statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the company said in the statement. “We will vigorously defend against it.”
The tech giant is also facing challenges to its “walled garden” strategy of tightly controlling the hardware, operating system, and apps available on its devices in Europe. Earlier this month, regulation in Europe forced the company to allow rival app stores onto its devices, including one from longtime rival Epic Games, maker of Fortnite.
