Mon | Mar 25, 2024 | 4:27 AM PDT

The U.S. Department of Justice has leveled a major antitrust case against Apple, accusing the iPhone maker of wielding consumer privacy and security as an "elastic shield" to justify anticompetitive business practices.

In an 88-page lawsuit filed March 21st, the DOJ alleges Apple has illegally maintained a monopoly over smartphone markets through a "broad, sustained, and illegal course of conduct." Central to the government's case is the claim that Apple has selectively compromised on privacy and security to boost its financial interests and lock out competition.

"Apple wraps itself in a cloak of privacy, security, and consumer preferences to justify its anticompetitive conduct," the lawsuit states. "Apple deploys privacy and security justifications as an elastic shield that can stretch or contract to serve Apple's financial and business interests."

The complaint provides several examples where it claims Apple has degraded privacy and security features when it serves the company's bottom line. This includes defaulting to unencrypted SMS messaging when iPhones communicate with non-Apple devices and blocking third-parties from bringing secure, cross-platform messaging to iPhones.

It also accuses Apple of sharing user data for advertising purposes, making Google the default Safari browser search engine despite privacy concerns, and restricting user privacy controls over digital wallets, location services, and other sensitive data troves.

The lawsuit portrays Apple's lauded privacy marketing and practices as "pretextual"—merely an excuse to protect its smartphone monopoly and revenue streams tied to the lucrative iPhone ecosystem.

"Consumers should not have to pay higher prices because companies violate the antitrust laws," said U.S. Attorney General Merrick Garland. "We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."

Joined by 16 state attorneys general, the Justice Department's case alleges these practices have undermined competition, forced higher costs on developers and consumers, and made it harder for users to switch from iPhones.

Apple pushed back forcefully, stating it would "vigorously defend" itself and warning the lawsuit "threatens who we are and the principles that set Apple products apart." The company has long marketed privacy as a key differentiator.

The high-stakes case thrusts Apple's privacy positioning directly into the spotlight of the antitrust battle. It could have major ramifications for how tech giants are allowed to leverage user data, security, and privacy in their products and business models.

Antitrust experts say the lawsuit's focus on Apple's privacy practices is a novel legal strategy that could remake the landscape for technology competition and consumer protection. The case may also reignite calls for broader reforms over data privacy and big tech's market power.

[RELATED: Apple Strengthens iMessage Security with Post-Quantum Encryption]

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Tags: Apple, Privacy, DOJ,