The U.S. Justice Department is preparing to take legal action against Apple Inc., alleging the tech giant’s violation of antitrust laws by restricting rivals’ access to hardware and software features on its iPhone. According to sources familiar with the matter, the lawsuit, expected to be filed in federal court, represents a significant escalation in the Biden administration’s campaign against major U.S. technology companies.
This move follows ongoing antitrust battles against other tech giants, with the Justice Department already pursuing a lawsuit against Alphabet Inc.’s Google for monopolization, while the Federal Trade Commission is engaged in antitrust cases against Meta Platforms Inc. and Amazon.com Inc.
Both Apple and the Justice Department have yet to comment on the impending legal action, with individuals knowledgeable about the matter preferring anonymity due to the confidential nature of the proceedings.
News of the impending lawsuit caused Apple’s shares to drop by as much as 1.4% in late trading, reaching $176.10. This development comes against the backdrop of a challenging year for Apple, with its shares having declined by 7.2% prior to the news.
This forthcoming case marks the third time in the past 14 years that the Justice Department has sued Apple for antitrust violations, but notably, it is the first instance where the iPhone maker is accused of illegally maintaining its dominant position.
Simultaneously, Apple faces increased scrutiny in Europe over alleged anticompetitive practices, including a recent €1.8 billion fine for impeding music streaming rivals from offering lower-priced deals. The company is appealing this penalty, asserting that regulators failed to find credible evidence of consumer harm.
Furthermore, Apple may confront a comprehensive investigation under the EU’s new Digital Markets Act, with potential penalties amounting to as much as 10% of the company’s annual worldwide revenue or up to 20% for repeat offenses.
The Justice Department initiated the latest case in 2019 under the Trump administration, prioritizing parallel cases against Google. The antitrust division, however, opted to address the allegations against Apple as they emerged amidst other legal battles, including Epic Games Inc.’s lawsuit against Apple for monopolization.
As the legal landscape evolves, Apple finds itself entangled in a complex web of regulatory challenges, both domestically and internationally, underscoring the ongoing scrutiny faced by major tech companies regarding competition and market dominance.
