The U.S. Justice Department on Thursday announced a sweeping antitrust lawsuit against Apple, accusing the tech giant of “unlawful exclusionary behaviour” by engineering an illegal monopoly in smartphones that boxes out competitors and stifles innovation.
The lawsuit, filed in federal court in New Jersey, alleges that Apple has monopoly power in the smartphone market and uses its control over the iPhone to “engage in a broad, sustained, and illegal course of conduct.”
The lawsuit — which was also filed with attorneys general from 15 states as well as D.C. — takes direct aim at the digital fortress that Apple Inc., based in Cupertino, Calif., has assiduously built around the iPhone and other popular products such as the iPad, Mac and Apple Watch to create what is often referred to as a “walled garden.”
Apple has defended the walled garden — meticulously designed hardware and software that can seamlessly flourish together while requiring consumers to do little more than turn on the devices — as an indispensable feature prized by consumers who want the best protection available for their personal information.
It has described the barrier as a way for the iPhone to distinguish itself from devices running on Google’s Android software, which isn’t as restrictive and is licensed to a wide range of manufacturers.
Antitrust regulators made it clear in their complaint that they see Apple’s walled garden most as a weapon to ward off competition, creating market conditions that enable it to charge higher prices that have propelled its lofty profit margins while stifling innovation.
WATCH | Merrick Garland explains why the U.S. Department of Justice is taking on a tech giant:
U.S. attorney general on why his department is taking on Apple
39 minutes ago
Duration 1:01
U.S. Attorney General Merrick Garland says recent cases against tech giants — including a major lawsuit against Apple — show the Department of Justice ‘does not have a different rule for the powerful as compared to the powerless.’
“Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers,” the Justice Department said in a statement. “Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.
“If left unchallenged, Apple will only continue to strengthen its smartphone monopoly,” Attorney General Merrick Garland said at a news conference on Thursday.
Apple called the lawsuit “wrong on the facts and the law” and said it “will vigorously defend against it.” The company said it would “set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the company said in a statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
Justice Department Sues Apple for Monopolizing Smartphone Markets<br><br>????: <a href=”https://t.co/sQuqVnTzaX”>https://t.co/sQuqVnTzaX</a> <a href=”https://t.co/9ipWckqfvc”>pic.twitter.com/9ipWckqfvc</a>
U.S. President Joe Biden has called for the Justice Department and the Federal Trade Commission to vigorously enforce antitrust statutes. The administration has already triggered lawsuits against Google and Amazon, accusing them of engaging in illegal tactics to thwart competition.
Apple is the world’s most prosperous company, with annual revenue of nearly $400 billion US and, until recently, a market value of more than $3 trillion. Apple’s shares have fallen by seven per cent this year even as most of the stock market has climbed to new highs.
Apple’s business interests are also entangled in the Justice Department’s case against Google, which went to trial last fall and is headed toward final arguments scheduled to begin May 1 in Washington, D.C. In that case, regulators are alleging Google has stymied competition by paying for the rights for its already dominant online search engine to be the automatic place to handle queries on the iPhone and a variety of web browsers in an arrangement that generates an estimated $15 billion to $20 billion US annually.
The Justice Department is following up on other recent attempts to force Apple to change the way it runs the iPhone and other parts of its business.
Epic Games, the maker of the popular Fortnite video game, filed an antitrust lawsuit against Apple in 2020 in an effort to break down the barriers protecting the iPhone App Store and a lucrative payment system operating within it.
Apple has long collected commissions ranging from 15 per cent to 30 per cent on digital transactions completed within apps, a setup that Epic alleged was enabled by an illegal monopoly that drives up prices for consumers.
WATCH l Class-action lawsuit concerning Canadians, older iPhones resolved:
Apple to pay $14.4M in settlement for deliberately slowing phones
17 days ago
Duration 1:48
B.C. Supreme Court approved a $14.4-million settlement from Apple over a class-action lawsuit accusing it of deliberately providing software updates that slowed iPhone 6 and 7 models.
After a month-long trial in 2021, in which Apple CEO Tim Cook testified, a federal judge ruled mostly in favour of Apple, with the exception of deciding that links to competing payment options should be permitted inside of iPhone apps. Apple unsuccessfully resisted that portion of the ruling until the U.S. Supreme Court refused to hear an appeal in January, forcing the company to relent. But the concessions that Apple made to comply with the ruling are still facing a “bad faith” challenge from Epic, which is seeking an April 30 hearing to ask for more changes.
European Union regulators have already vowed to crack down on Apple if they find the company’s tactics continue to thwart true consumer choice. European regulators slapped a $2 billion US (1.8 billion euro) fine on Apple earlier this month after concluding that the company had undermined competition in the music streaming through the iPhone, despite Spotify being the leader in that market.
In Canada, the B.C. Supreme Court recently approved a $14.4-million settlement from Apple over a class-action lawsuit accusing it of deliberately providing software updates that slowed iPhone 6 and 7 models.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
