Justice Department to sue Apple for antitrust violations

Justice Department to sue Apple for antitrust violations

The Justice Department is set to sue Apple Inc. on Thursday, accusing the world's second-most valuable technology company of violate antitrust laws by preventing rivals from accessing your iPhone's hardware and software features.

The lawsuit, which is expected to be filed in federal court, according to people familiar with the matter, intensifies the Biden administration's antitrust fights against most of the largest American tech 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.

Apple and the Justice Department did not immediately respond to requests for comment. The people known asked not to be identified because the matter is confidential.

Apple shares fell as much as 1.4% to $176.10 in late trading following the news. They were down 7.2% this year through Wednesday's close.

The upcoming case will mark the third time the Justice Department has sued Apple for antitrust violations in the last 14 years.but it is the first case that accuses the iPhone manufacturer of illegally maintaining its dominant position.

The lawsuit comes as Apple is also coming under increasing scrutiny in Europe for alleged anti-competitive conduct. The company was fined €1.8 billion this month for preventing its music streaming rivals from offering cheaper deals. Apple is appealing the penalty and has said regulators failed to uncover any “credible evidence of consumer harm.”

Meanwhile, the company could face a full-blown investigation under new EU rules for Big Tech (the Digital Markets Act) that came into force earlier this month. Rivals have criticized the new App Store rules that came into effect in Europe, complaining that the changes are likely to result in higher prices for developers. Penalties for failing to comply with new EU rules can be severe: up to 10% of a company's annual global revenue or up to 20% for repeat offenders.

The Justice Department opened the latest case in 2019 during the administration of former President Donald Trump. However, the antitrust division decided to prioritize twin cases against Google, taking a backseat when Fortnite maker Epic Games Inc. sued Apple for monopolization in 2020 and that case reached federal court.