Justice Department to Sue Apple for Antitrust Violations as Soon as Thursday

Anna Edgerton, Kartikay Mehrotra and Leah Nylen

Thu, Mar 21, 2024, 9:35 AM2 min read

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(Bloomberg) -- The US Justice Department is preparing to announce an antitrust lawsuit against Apple Inc. Thursday, according to two people familiar with the matter.

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The suit is expected to be filed in federal court in New Jersey, said one of the people, both of whom asked not to be named discussing a confidential matter.

Apple shares fell more than 1% to $176.72 at 9:34 a.m. in New York on Thursday. They had been down 7.2% this year through Wednesday’s close.

The move escalates the Biden administration’s antitrust fights against most of the biggest US technology giants. The Justice Department is already suing Alphabet Inc.’s Google for monopolization, while the Federal Trade Commission is pursuing antitrust cases against Meta Platforms Inc. and Amazon.com Inc.

The US is accusing Apple, the world’s second-most-valuable tech company, of violating antitrust laws by blocking rivals from accessing hardware and software features of its iPhone, among other breaches.

Apple and the Justice Department didn’t respond to requests for comment.

The coming case will mark the third time the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first case accusing the iPhone maker of illegally maintaining its dominant position.

The lawsuit comes as Apple also is coming under increasing scrutiny in Europe over alleged anticompetitive behavior. The company was hit with a €1.8 billion fine this month for shutting out music streaming rivals from offering cheaper deals. Apple is appealing the penalty and has said that regulators failed to uncover any “credible evidence of consumer harm.”

Meanwhile, the company may face a full-blown investigation under the EU’s new rules for Big Tech — the Digital Markets Act — which went into force earlier this month. Rivals have dinged new App Store rules that came into effect in Europe, complaining that changes are likely to result in higher prices for developers. Penalties for failing to comply with the EU’s new rules can be severe — as much as 10% of a company’s annual worldwide revenue or up to 20% for repeat offenders.

The Justice Department opened the latest case in 2019 under former President Donald Trump. The antitrust division, though, chose to prioritize twin cases against Google, taking a back seat as Fortnite maker Epic Games Inc. sued Apple for monopolization in 2020 and that case worked its way through the federal courts.

--With assistance from Samuel Stolton.

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