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Apple is to blame for Microsoft and Amazon's phone failures, DOJ says

Beatrice Nolan   

Apple is to blame for Microsoft and Amazon's phone failures, DOJ says
  • Apple is facing an antitrust lawsuit from the US Department of Justice.
  • The lawsuit argues that Apple's tactics have limited the success of other smartphone companies.

The US Department of Justice is blaming Apple for Amazon and Microsoft's phone failures.

On Thursday, Apple was hit with a brutal antitrust lawsuit that accused the Big Tech company of engaging in illegal anticompetitive behaviors in the smartphone market to achieve the iPhone's dominance.

The DOJ and attorneys general from 16 states say their focus on the iPhone relates to the ways Apple limits the functionality of other products and services to iPhone users.

Prosecutors said in the suit: "Many prominent, well-financed companies have tried and failed to enter the relevant markets because of these entry barriers successfully."

The DOJ cited past smartphone failures, including Amazon's 2014 Fire mobile phone, HTC, LG, and Microsoft's mobile business.

The Fire phone famously flamed out in just over a year, forcing the company to take a $170 million write-down charge on costs and leaving Amazon with $83 million worth of unsold Fire Phones still in its inventory, Time reported in 2014.

In the suit, the DOJ says Samsung and Google remain the only "meaningful competitors in the US performance smartphone market."

"Barriers are so high that Google is a distant third to Apple and Samsung despite the fact that Google controls development of the Android operating system," the suit read.

The DOJ likened the legal action to the antitrust lawsuit filed against Microsoft in 1998.

The department accused Apple of engaging "in many of the same tactics that Microsoft used," including "higher prices, fewer new products, and a worse user experience."

In a statement shared with Business Insider, a representative for Apple said that if the suit were successful, "it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect."

The company also said the suit's success "would set a dangerous precedent, empowering the government to take a heavy hand in designing people's technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it."

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