WASHINGTON, March 21 (Reuters) - The U.S. Department of

Justice and 15 states on Thursday sued Apple ( AAPL ), alleging

it used the powerful demand for its iPhone and other products to

drive up prices for its services and hurt smaller rivals in the

first major antitrust effort against the smartphone maker by the

Biden administration.

Apple ( AAPL ) joins a list of major tech companies sued by U.S.

regulators, including Alphabet's Google, Meta

Platforms ( META ) and Amazon.com ( AMZN ) across the

administrations of both former President Donald Trump and

President Joe Biden.

"Consumers should not have to pay higher prices because

companies violate the antitrust laws," Attorney General Merrick

Garland said in a statement. "If left unchallenged, Apple ( AAPL ) will

only continue to strengthen its smartphone monopoly."

The Justice Department, which was also joined by the

District of Columbia in the lawsuit, alleges that Apple ( AAPL ) uses its

market power to get more money from consumers, developers,

content creators, artists, publishers, small businesses and

merchants.

The 88-page lawsuit, filed in U.S. federal court in Newark,

New Jersey, said it was focused on "freeing smartphone markets

from Apple's ( AAPL ) anticompetitive and exclusionary conduct and

restoring competition to lower smartphone prices for consumers,

reducing fees for developers, and preserving innovation for the

future."

In the lawsuit, the U.S. added that "Apple ( AAPL ) repeatedly

chooses to make its products worse for consumers to prevent

competition from emerging."

Apple ( AAPL ) disagreed in a statement, saying: "This lawsuit

threatens who we are and the principles that set Apple ( AAPL ) products

apart in fiercely competitive markets. If successful, it would

hinder our ability to create the kind of technology people

expect from Apple ( AAPL ) - where hardware, software, and services

intersect."

Apple ( AAPL ) shares were trading 3% lower.

Apple ( AAPL ) has already been subject to antitrust probes and

orders in Europe, Japan and Korea, as well as lawsuits from

corporate rivals such as Epic Games.

One of Apple's ( AAPL ) most lucrative businesses - its App Store,

which charges developers commissions of up to 30% - has already

survived a lengthy legal challenge under U.S. law by Epic. While

the lawsuit found that Apple ( AAPL ) did not violate antitrust laws, a

federal judge ordered Apple ( AAPL ) to allow links and buttons to pay

for apps without using Apple's ( AAPL ) in-app payment commission.

In Europe, Apple's ( AAPL ) App Store business model has been

dismantled by a new law called the Digital Markets Act that went

into effect earlier this month. Apple ( AAPL ) plans to let developers

offer their own app stores - and, importantly, pay no

commissions - but rivals such as Spotify and Epic argue Apple ( AAPL ) is

still making it too hard to offer alternative app stores.

The rulings on Apple's ( AAPL ) App Store forced the Justice

Department to look at Apple's ( AAPL ) other practices for the basis of a

complaint, such as how Apple ( AAPL ) allows outside firms to access the

chips and sensors in the iPhone.

Consumer hardware firms, such as smart-tracker maker Tile

Inc, have long complained that Apple ( AAPL ) has restricted the ways in

which they can work with the iPhone's sensors while developing

competing products that have greater access.

Apple ( AAPL ) began selling AirTags - which can be attached to items

like car keys to help users find them when they are lost -

several years after Tile had been selling a similar product.

Similarly, Apple ( AAPL ) has restricted access to a chip in the

iPhone that allows for contactless payments. Credit cards can

only be added to the iPhone by using Apple's ( AAPL ) own Apple Pay

service.

And Apple ( AAPL ) has also faced criticism over its iMessage

service, which only works on Apple ( AAPL ) devices.

Apple ( AAPL ) has long argued that it restricts access to some user

data and some of the iPhone's hardware by third-party developers

for privacy and security reasons.