AG Garland: Good morning. Earlier today, the Department of Justice,
joined by 15 states and the District of Columbia sued Apple in the U.S. District Count for
the District of New Jersey for violating Section 2 of the Sherman Antitrust Act. Over the last two decades, Apple has become
one of the most valuable public companies in the world. Today, its net income exceeds the individual
Gross Domestic Product of more than 100 countries. That is in large part due to the success of
the iPhone, Apple’s signature smartphone product. For over a decade, iPhone sales have made
up a majority of Apple's annual revenue. Today, Apple's share of the U.S. performance
smartphone market exceeds 70%, and its share of the entire U.S. smartphone market exceeds
65%. Apple charges as much as nearly $1,600 for
an iPhone. But as our complaint alleges, 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. Consumers should not have to pay higher prices
because companies break the law. We allege that Apple has employed a strategy
that relies on exclusionary, anticompetitive conduct that hurts both consumers and developers. For consumers, that has meant fewer choices;
higher prices and fees; lower quality smartphones, apps, and accessories; and less innovation
from Apple and its competitors. For developers, that has meant being forced
to play by rules that insulate Apple from competition. And as outlined in our complaint, we allege
that Apple has consolidated its monopoly power not by making its own products better — but
by making other products worse. Apple carries out its exclusionary, anticompetitive
conduct in two principal ways: First, Apple imposes contractual restrictions and fees
that limit the features and functionality that developers can offer iPhone users. Second, Apple selectively restricts access
to the points of connection between third-party apps and the iPhone’s operating system,
degrading the functionality of non-Apple apps and accessories. As a result, for most of the past 15 years,
Apple has collected a tax in the form of a 30% commission on the price of any app downloaded
from the App Store as well as on in-app purchases. Apple is able to command these fees from companies
of all sizes. Apple has also suppressed the emergence of
programs like cloud streaming apps — including gaming apps — as well as super apps that
could reduce user dependence on Apple's own operating system and expensive hardware. And, as any iPhone user who has ever seen
a green text message, or received a tiny, grainy video can attest — Apple's anticompetitive
conduct also includes making it more difficult for iPhone users to message with users of
non-Apple products. It does this by diminishing the functionality
of its own messaging app and by diminishing the functionality of third-party messaging
apps. By doing so, Apple knowingly and deliberately
degrades quality, privacy, and security for its users. For example, if an iPhone user messages a
non-iPhone user in Apple Messages, the text appears not only as a green bubble, but incorporates
limited functionality: The conversation is not encrypted; videos are pixelated and grainy;
and users cannot edit messages or see typing indicators. As a result, iPhone users perceive rival smartphones
as being lower quality because the experience of messaging friends and family who do not
own iPhones is worse — even though Apple is the one responsible for breaking cross-platform
messaging. And it does so intentionally. For example, in 2013, a senior executive at
Apple explained that supporting cross-platform messaging in Apple Messages, “would simply
serve to remove [an] obstacle to iPhone families giving their kids Android phones.” In 2022, Apple’s CEO was asked whether Apple
would fix iPhone-to-Android messaging. The questioner added: “not to make it personal
but I can’t send my mom certain videos.” Apple's CEO responded, “Buy your mom an
iPhone.” In addition to selectively controlling app
distribution and creation, we allege that Apple is violating the law by conditionally
restricting developers’ access to the interface which needed to make an app functional on
the Apple operating system. For a product like a smartwatch or a digital
wallet to be useful to an iPhone user, it must be able to communicate with the iPhone’s
operating system. But Apple creates barriers that make it extremely
difficult and expensive for both users and developers to venture outside the Apple ecosystem. When it comes to smartwatches, Apple not only
drives users to purchase an Apple Watch — which is only compatible with an iPhone — it also
uses its technical and contractual controls to make it harder for someone with an iPhone
to use a non-Apple smartwatch. And when it comes to digital wallets, Apple’s
exclusionary conduct goes a step further. Digital wallets allow users to store and use
passes and credentials in a single app — including credit cards, personal identification, movie
tickets, and car keys. Apple Wallet is Apple’s proprietary digital
wallet on the iPhone. Apple actively encourages banks, merchants,
and other parties to participate in Apple Wallet. But it simultaneously exerts its monopoly
power to block these same partners from developing alternative payment products and services
for iPhone users. For example, Apple has blocked third-party
developers from creating competing digital wallets on the iPhone that use what is known
as tap-to-pay functionality. That is the function that makes a digital
wallet — well, a wallet. Instead, Apple forces those who want to use
the wallet function to share personal information with Apple — even if they would prefer to
share that information solely with their bank, medical provider, or other trusted third party. When an iPhone user puts a credit or debit
card in Apple Wallet, Apple inserts itself into the process that could otherwise occur
directly between the user and card issuer. This introduces an additional potential point
of failure for the privacy and security of Apple users. And that is just one way in which Apple is
willing to make the iPhone less secure and less private in order to maintain its monopoly
power. The Supreme Court defines monopoly power as
“the power to control prices or exclude competition.” As set out in our complaint, Apple has that
power in the smartphone market. Now, having monopoly power does not itself
violate the antitrust laws. But it does when a firm acquires or maintains
monopoly power — not because it has a superior product or superior business acumen — but
by engaging in exclusionary conduct. As set out in our complaint, Apple has maintained
its power not because of its superiority, but because of its unlawful exclusionary behavior. Monopolies like Apple's threaten the free
and fair markets upon which our economy is based. They stifle innovation; they hurt producers
and workers; and they increase costs for consumers. If left unchallenged, Apple will only continue
to strengthen its smartphone monopoly. But there’s a law for that. The Justice Department will vigorously enforce
antitrust law. Enforcing the law protects consumers from
higher prices and fewer choices. That is the Justice Department’s legal obligation. That is what the American people expect. That is what they deserve. I am grateful to the attorneys and staff of
the Department’s Antitrust Division for their tireless work on this case on behalf
of the American people. I will now turn the podium over to the Deputy
Attorney General. DAG Monaco: Thank you very much Mr. Attorney
General — and good morning, everyone. In our fight against corporate misconduct,
the Department’s approach is straightforward and relentless. We identify the most serious wrongdoers, whether
individuals or companies. And then we focus our full energy and devote
all necessary resources to holding them accountable. Accountability promotes fairness. It drives deterrence. And it advances the rule of law. By holding all companies to the same standards,
our approach to corporate enforcement benefits all Americans — Americans who deserve and
demand a justice system that holds accountable those who break the law. For over a century, our federal antitrust
laws have been a critical tool for protecting competition — the competition that fuels
and drives our nation’s economy. These laws protect consumer choice in the
market. They keep prices in check. They promote quality. And they open doors to innovation. Today, the Department alleges that Apple — one
of the world’s largest tech companies — crossed the line from rigorous competition to anticompetitive
exclusion, unlawfully maintaining a monopoly in violation of the Sherman Act. The complaint makes clear that, for years,
Apple has tightened its grip on the smartphone market. It has done so not through product improvements
— but by maintaining a chokehold on competition — locking its customers in to the iPhone,
while locking its competitors out of the market. As a result, and as the complaint details,
Apple has gone from revolutionizing the smartphone market to stalling its advancement. This shift has smothered an entire industry
— from users to app developers to the next generation of innovators. Apple’s anticompetitive conduct must stop. Sixteen other Attorneys General agree — and
have joined us in bringing this lawsuit against Apple. I want to thank the women and men of the Antitrust
Division for their commitment to promoting competition and protecting consumers and workers
in all of their work. And I want to thank Assistant Attorney General
Kanter for his leadership. Their work makes clear that: No matter how
powerful — no matter how prominent — no matter how popular — no company is above
the law. Through today’s action, we reaffirm our
unwavering commitment to this principle. With that, I’ll hand it off to the Acting
Associate Attorney General, Ben Mizer. AAG Mizer: Thank you, Deputy Attorney General
Monaco. And I want to echo the Attorney General’s
and the Deputy Attorney General’s thanks to the leadership and staff of the Antitrust
Division for all their extraordinary work in promoting competition and advancing economic
opportunity. The landmark Microsoft case held a monopolist
liable under the antitrust laws for leveraging its market position to undermine technologies
that would have made it easier for users to choose different computer operating systems. Today’s complaint alleges that Apple has
engaged in many of the same tactics that Microsoft used. The complaint describes how Apple’s anticompetitive
conduct discourages developers from offering new and innovative applications and makes
it more difficult for consumers to switch to other smartphones. Apple's conduct leaves consumers with higher
prices, fewer new products, and a worse user experience. In this way, today’s complaint also reflects
the broader importance of vigorous antitrust enforcement. Markets that lack competition shift power
from consumers and workers to powerful corporations. A lack of competition means fewer choices
and higher prices for consumers. It means fewer options and lower wages for
workers. And it means that the owners of powerful corporations
make more without expanding the size of the pie for anyone else. Promoting competition through antitrust enforcement
levels that playing field and is critical to promoting economic opportunity and equity. The Department has been, and remains, committed
to pursuing these goals wherever anticompetitive conduct arises. In the airline industry, we have successfully
challenged mergers that would lead to higher ticket prices and fewer flight options for
travelers. Earlier this month, JetBlue and Spirit announced
that they were abandoning their proposed merger — a major victory for Americans who rely
on competition between airlines to travel affordably. We have also weighed in on important cases
affecting how much American families pay for housing, explaining why it is unlawful for
landlords to collude to raise rental prices even when AI technology is used to do that. And we have prioritized criminal antitrust
enforcement, cracking down on bid-rigging and procurement fraud schemes that victimize
federal, state, and local governments – and ultimately, taxpayers. These are just a few recent examples of the
work that the Antitrust Division — and the Department more broadly — has done to ensure
that the American people have equal opportunity in the marketplace. Today’s suit against Apple reflects our
continued commitment to promoting competition and advancing economic justice. I'll now turn it over to Assistant Attorney
General Jonathan Kanter. AAG Kanter: Good Morning. Thank you, Attorney General Garland, Deputy
Attorney General Monaco and Acting Associate Attorney General Mizer. And a special welcome to the New Jersey Attorney
General Platkin and I’d also like to acknowledge Principal Deputy for the Antitrust Division
Doha Mekki, Deputy Associate – Deputy Assistant Attorney General Hetal Doshi and Deputy Assistant
Attorney General Michael Kades. 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, and Microsoft. Today, we add to that distinguished legacy
by announcing an antitrust lawsuit against Apple for monopolizing smartphones. Approximately 25 years ago, the Department
of Justice 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 proliferation 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. And the remedy paved the way for Apple to
launch iTunes, 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 and I quote “good enough” close quote. 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. And 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. And in doing so, we protect the market for
the innovations that we can’t yet perceive. Alongside our colleagues at 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 explains Apple’s longstanding
pattern of harmful anticompetitive behavior. And Apple has inflicted using anticompetitive
behavior -- anticompetitive harm that is acute and substantial. For example, Apple’s conduct has resulted
in: less competition to lower the price of smartphones for American consumers. 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, 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, the US 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 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 at Apple expressed his
concerns in candid terms: a – and I quote --“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 to this competitive
threat, Apple would “force” developers into using Apple’s payment system. As we allege in our lawsuit, Apple repeatedly
responded to competitive threats like this one 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, many
of whom are in the back. They are exceptional public servants, and
I am so proud call them colleagues. I would also like to thank the attorneys general
and their incredible 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 from the District of New Jersey who join us
in filing this important and historic case. It is a great privilege now to turn the podium
over to the Attorney General from the great state of New Jersey. NJ AG Platkin: Good morning. I am honored to stand here today alongside
Attorney General Garland, Deputy Attorney General Monaco, Acting Attorney General Mizer
and Assistant Attorney General Kanter and the rest of the Department of Justice on behalf
of both the 9.3 million residents of the state of New Jersey and a bipartisan group of attorneys
general. Because no matter which great state we represent,
we are all responsible for protecting the well-being of our residents, and that includes
their economic well-being. As we’ve heard, we’re here today because
Apple has consistently and deliberately engaged in anti-competitive business practices designed
to maximize their profits and profits for their shareholders while minimizing the ability
of consumers to switch to a competitor or otherwise cut their costs. I wager that just about everyone in this room,
and everyone watching this press conference has a smartphone. In nearly 7 in everyone 10 of smartphones
are iPhones. That’s not an accident. Rather than compete on a nearly even playing
field, Apple has stifled innovation in order to gain total control of the iPhone software
ecosystem. As a result, iPhone users become dependent
on Apple and its products and find the process of switching phones exceedingly costly and
complex. The company has created a marketplace in which
developers, consumers and others must must play only by rules established by Apple, for
Apple. In 2016 the company announced it sold 1 billion
iPhones, a number that continues to climb. When that milestone was reached, Apple CEO
Tim Cook said iPhones had become “more than a consistent companion. The iPhone is truly an essential part of our
everyday life.” That dependence was no accident. Apple made the iPhone a part of our daily
life by limiting the features and functionality that developers could offer iPhone customers
and by selectively controlling access between apps and the iPhone operating system. As we know in the complaint, Apple protects
its business model by restricting technologies that would make it easier for iPhone customers
to switch to another smartphone. Those restrictions go to the core of Apple’s
unlawful content, and the end result is that you make more money for an inferior product. As New Jersey’s Attorney General, it is
my responsibility to protect the rights of consumers in my state and ensure that business
treat them fairly, no matter how large or powerful they are. And that’s what my fellow attorneys general
do every day on behalf of their residents. Monopolies are the antithesis of our free
market economy. They drive up costs and limit options for
consumers across our states and across this country. And thanks to the actions we are taking today
alongside our partners at the Department of Justice, we will stop them. Thank you. KEN DILANIAN (NBC): Mr. Attorney General. Let me ask a question about antitrust. Obviously the Justice Department is suing
Google. Federal Trade Commission is suing Amazon and
Facebook. What does it say to you? Those are four of the greatest American business
success stories of modern history. What does it say to you that they're all accused
of illegal anti-competitive behavior? And if you can indulge me in an off-topic
question. ATTORNEY GENERAL GARLAND (AG): Can I do the
antitrust one first, and maybe I'll have more success with that one. I don't know. Look, the Justice Department does not have
a different rule for the powerful as compared to the powerless. It does not have a different rule for the
rich as compared to the poor. We have one rule. We look at the facts. We look at the law. We make the appropriate determinations. I will say that with respect to resource allocation
when you have an institute, institution with lots of resources that in our view is harming
the American economy and the American people. It's important for us to allocate our resources
to protect the American people. And that is certainly the case where individual
Americans have no ability to protect themselves. KEN DILANIAN: On the Special Counsel Robert
Hur’s report, you’ve personally come in for a lot of criticism in particular from
the White House. Anonymous officials who say that you should
have acted to keep him from characterizing the President’s memory in that report, that
you should have stepped in. What’s your response to that. AG: I haven’t – No one from the White
House has said that to me. When the President announced my nomination,
he said to me directly and then to the American public that he intended to restore the independence
and the integrity of the Justice Department. And that he wanted me to serve as the lawyer
for the American people not the lawyer for the President. I sincerely believe that that’s what he
intended then and I sincerely believe that that’s what he intends now. KEN DILANIAN: But did you think that was appropriate
the language that he used to characterize the President’s mental state? AG: Look, they – I said from the very beginning
that I would make public the report of the Special – of all the Special Counsels appointed
during the period of my service. That is consistent with the regulation which
requires a Special Counsel to explain what the Special Counsel’s decisions are. It is consistent with the precedence, the
full disclosure of all special counsel reports in the entire 25 years in which the regulation
has been in effect. It’s consistent with the common practice
during the previous period of the independent counsel statute. The idea that an attorney general would edit
or redact or censor the Special Counsel’s explanation for why the Special Counsel reached
the decision the Special Counsel did – that’s absurd. STEFANIA PALMA (Financial Times): So today's
complaint focuses specifically on the iPhone market and smartphone markets. There were reports in recent months, saying
that potentially the DOJ could also be considering looking at IPads or other parts of Apple's
business. So I was curious if you could explain to us
why focus specifically on smartphones at this moment in time and whether the DOJ remains
open to potentially broaden this challenge against Apple, given also the argument that
this alleged misconduct actually has ripple effects across the economy. AG: Well, our general practice is not to discuss
matters that we have not announced. And so I don't or whether we're announcing
them or not, so I won't answer the latter part of your question. Look on the first part of the question. I think our complaint explains why we're focused
on the iPhone. It's the exclusionary conduct by Apple to
maintain its monopoly in that area, and it's the consequences for innovation prices and
the effect on both consumers, developers, banks, credit card companies. I think I'll let Mr. Kanter say anything else
he wishes to add to that. AAG KANTER: Thank you, Attorney General. We focus on the core monopoly in this complaint. Apple’s core monopoly is in the iPhone,
and we focus on the conduct that Apple is engaged in to legally maintain its monopoly
on the iPhone, and that relates to the entire iPhone ecosystem, and we've provided extensive
detail about practices across a broad range of services and features throughout the iPhone
ecosystem that have contributed to illegally maintaining Apple's monopoly power. DAVE MICHAELS (WSJ): Dave Michaels from the
Wall Street Journal. The government is not the first plaintiff
to accuse Apple of anti-competitive conduct. So could you explain why you think the government
is better positioned here to prosecute a successful case, including, why this is a viable case
in spite of the fact that Apple mostly beat the case that the Ethic games filed against
Apple, and then finally, do you think your lawsuit will ultimately lead to lower fees
in the app store for developers and consumers? AG: Look the United States normally wins the
cases that it brings, we bring cases because we believe the facts and law justify them
and because we believe that we are likely to win those cases now I'll let Mr. Kanter
again explain any further that he'd like. AAG KANTER: Thank you, Attorney General. Our case, as I mentioned before, focuses on
the Apple's core monopoly, which is the iPhone. We are focused on a pattern of conduct that
goes back over a decade that Apple is engaged in in order to reinforce its monopoly power
by excluding rivals by excluding technologies and stifling innovations that would threaten
Apple stranglehold on its monopoly power. The extensiveness and the specificity in our
complaint speaks for itself. And I think you will notice that, it is a
distinct from cases that have been brought elsewhere, which focus on narrow products
and services. GRADY (Fox Business): Thank you, Attorney
General, I have a question specifically about the app store portion of this. Um there's already a member of Congress this
morning in response to this lawsuit saying that if Apple can't vet the apps that are
sold on its platform, it opens the door to apps made in China and Russia and other adversaries
if you will from getting on to people's phones, how would you respond to that criticism? AG: So I'll just say in general, and once
again, I'm going to go to Mr. Kanter for the specifics. This lawsuit is not aimed at every kind of
vetting or other activity that Apple does with respect to the app store. It is aimed at exclusionary conduct as we've
set forth in the complaint. There are many things of that exclusionary
conduct that do not help security. And in fact, some that actually harm security. So I'm going to leave it to Mr. Kanter to
describe this in more specifics. KANTER: Thank you, Attorney General, Privacy
and security are extremely important. Values competition. Makes devices and services more private. And more secure. Our complaint explains very clearly while
the legal exclusionary conduct that Apple has engaged in is not necessary to protect
privacy, while the illegal and exclusionary conduct that Apple has engaged in is not necessary
to protect security and privacy. Our, in fact, as the attorney general mentioned
our complaint explains that in many instances, Apple's conduct has made its ecosystem less
private and less secure.
