The U.S. Department of Justice (DOJ) has filed an antitrust lawsuit against Apple, alleging that the tech giant has unlawfully monopolized the smartphone market to the detriment of consumers, developers, and competitors. This case targets Apple’s integrated ecosystem – including the iPhone, Apple Watch, and services like Apple Pay – suggesting that these elements collectively contribute to an anti-competitive environment.

The lawsuit, supported by 16 attorneys general and filed in New Jersey federal court, accuses Apple of engaging in practices that not only fortify its dominance in the smartphone sector but also extend to its advertising, browser, FaceTime, and news services. The DOJ’s action underscores a broader global scrutiny of tech giants, with Apple’s “walled-garden” approach at the heart of this challenge.

The suit seriously threatens Apple’s business model, which tightly integrates hardware, software, and services. The DOJ has hinted at the possibility of seeking structural changes within Apple, a move that echoes Bell System breakup in 1982. Financial markets reacted swiftly (and negatively) to the news.

Apple has defended its ecosystem, arguing that it delivers the integrated experience consumers expect while fostering competition.

This is going to be a fight. Apple does employ strongarm tactics and it does overuse its dominant position to drive deals that most other companies cannot, but I am reminded of the world-changing, devastatingly bad outcome of the 1990s Microsoft case. There, if you remember, the DOJ forced Microsoft to unbundle Internet Explorer from Windows Explorer. (Ask your favorite cybersecurity expert how that worked out.)

Our friends in Cupertino are not angels, nor are they innocent of all charges, but I hope the DOJ concentrates on the operational issues that can be fixed without destroying the things that make Apple, Apple. The DOJ should not be in the business of designing hardware or software. That won’t be good for anyone.

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