01:56 PM EDT, 03/21/2024 (MT Newswires) -- Apple ( AAPL ) is facing a lawsuit filed by the US Department of Justice and 16 state and district attorneys general for alleged "monopolization or attempted monopolization" of smartphone markets, sending the iPhone maker's shares lower Thursday.

The civil antitrust lawsuit -- filed in the US District Court for the District of New Jersey -- alleges that the technology giant's "exclusionary conduct" makes it harder for US consumers to switch smartphones, undermines tech innovation, and imposes "extraordinary costs" on developers and other stakeholders, the DOJ said in a statement. The states of New Jersey, Arizona, California, and New York are among the plaintiffs.

"Apple ( AAPL ) has monopoly power in the smartphone and performance smartphones markets, and it uses its control over the iPhone to engage in a broad, sustained, and illegal course of conduct," the DOJ said. "This anticompetitive behavior is designed to maintain Apple's ( AAPL ) monopoly power while extracting as much revenue as possible."

The company's shares were down 3.7% in Thursday afternoon trade.

Apple ( AAPL ) said that the suit was "wrong on the facts and the law" while the company plans to defend against it.

"This lawsuit threatens who we are and the principles that set Apple ( AAPL ) products apart in fiercely competitive markets," the company said in a statement e-mailed to MT Newswires. If successful, the suit would set "a dangerous precedent, empowering government to take a heavy hand in designing people's technology," Apple ( AAPL ) added.

Among other things, the lawsuit accuses the company of limiting third-party smartwatch functionality, forcing buyers of the Apple Watch to continue buying iPhones. The complaint alleges the company has made the quality of cross-platform messaging "worse, less innovative, and less secure."

The suit alleges that Apple's ( AAPL ) anticompetitive practices stretch beyond its key iPhone and Apple Watch businesses and affect web browsers, video communication, and automotive services, among other things. "Apple ( AAPL ) has every incentive to extend and expand its course of conduct to acquire and maintain power over next-frontier devices and technologies," the DOJ said in a statement.

"This case is about 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," the plaintiffs said in a court filing.

Price: 172.05, Change: -6.63, Percent Change: -3.71