The US has filed a landmark lawsuit against Apple which accuses the tech giant of monopolising the smartphone market and crushing competition.

In the lawsuit, the justice department alleges the company used its control of the iPhone to illegally limit competitors and consumer options.

The complaint accuses it of squashing the growth of new apps and reducing the appeal of rival products.

Apple has vowed to "vigorously" fight the lawsuit and denies the claims.

The lawsuit, filed to a federal court in New Jersey, alleges that Apple used "a series of shapeshifting rules" in a bid to "thwart innovation" and "throttle" competitors.

In a statement, Attorney General Merrick Garland said the company "undermines apps, products and services that would otherwise make users less reliant on the iPhone... and lower costs for consumers and developers".

Mr Garland added that unless Apple is challenged, it will continue to "strengthen its smartphone monopoly".

The complaint lists a number of "anti-competitive" steps allegedly taken by the company, including blocking apps with broad functionality, suppressing mobile cloud streaming services, limiting third-party digital wallets and "diminishing the functionality" of smartwatches not made by the company.

A spokesman for Apple, Fred Sainz, told US media that the lawsuit was "wrong on the facts and the law" and that Apple would "vigorously defend against it".

"The lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets," Mr Sainz said. "If successful, it would hinder our ability to create the kind of technology people expect from Apple."

It marks the third time Apple has been sued by the Justice Department since 2009, and is the first antitrust challenge against the company under President Joe Biden's administration.

Apple has faced a growing legal backlash over its iOS ecosystem and business practices. Last month, it was fined €1.8bn (£1.5bn) by the EU for breaking competition laws over music streaming.

The firm had prevented streaming services from informing users of payment options outside the Apple app store, the European Commission said.

Competition commissioner Margrethe Vestager said Apple had abused its dominant position in the market for a decade, and ordered the tech giant to remove all of the restrictions. Apple said it would appeal against the decision.