The Department of Justice will be filing a long-anticipated lawsuit against Apple AAPL 1.47% possibly as soon as this month, alleging antitrust behavior on the part of the tech giant, Barron’s has learned.
The case could conceivably challenge Apple’s core business model, as it would likely focus on the iPhone and other hardware and its ecosystem—namely Apple’s App Store and products such as the Apple Watch and services such as iTunes. It would argue the company unfairly disadvantages tech rivals by making it harder and more costly for them to compete.
According to several individuals familiar with the investigation, the exact timing of the suit is unclear but representatives of Apple have met with officials in the DOJ’s antitrust division in a so-called last rites meeting in an attempt to head off litigation by the government. The two sides were far apart. Apple and the Department of Justice declined to comment. The antitrust division, now headed by Assistant Attorney General Jonathan Kanter, which has been investigating Apple for more than fours years, would be filing its case in the wake of the European Union earlier this month fining Apple nearly $2 billion for favoring its own music service over rivals such as Spotify.
After years of debating whether or not to take action against alleged overstepping by powerful tech-platform companies, with an incipient lawsuit against Apple, Washington will now be fighting four of them in court. The DOJ has also filed two suits against Apple’s competitor and sometimes partner, Alphabet GOOGL 1.16% ’s Google— one focused on its online advertising business filed last year and an earlier suit filed in 2020 accusing Google of stifling competition for internet search. Meanwhile, the Federal Trade Commission has sued META 1.87% Meta Platforms in 2022 and AMZN 1.28% Amazon last year in two other cases. Of this cohort of companies, only Microsoft MSFT 0.91% remains free from a major federal investigation.
Apple recently resolved a long legal battle with Epic Games, the maker of Fortnite, when the Supreme Court declined to take up the case in January. Epic CEO Tim Sweeny wrote on social media: “The court battle to open iOS to competing stores and payments is lost in the United States. A sad outcome.” Apple agreed to make changes to its App Store to satisfy the lower-court judgment.
With this DOJ antitrust suit, Apple likely faces another protracted legal battle, though that could work in the company’s favor in two ways. First, a change in administration and/or in the political winds could make the suit less of a priority for the government. Second, as technological trends evolve and shift business models—as, for instance, generative AI is doing presently—investigations can sometimes appear to be fighting the last war’s battles.
