Apple to Face US Antitrust Lawsuit as Soon as March

Apple Inc. is poised to face a US antitrust lawsuit as soon as March as the Justice Department prepares to take on one of the world’s most valuable companies, according to people familiar with the case.

Antitrust enforcers allege that Apple has imposed software and hardware limitations on its iPhones and iPads to impede rivals from effectively competing, echoing concerns raised by Spotify Technology SA, bluetooth tracker Life360 Inc.’s Tile and messaging service Beeper. The Justice Department and Apple lawyers have met three times to discuss a potential suit, said the people, speaking anonymously to discuss an ongoing probe.

The Justice Department hopes to file a suit in the first quarter of the year, though that timing could slip, the people said, as the DOJ’s most senior antitrust officials haven’t yet signed off on the complaint. The agency has been probing the company since 2019, but chose to prioritize its twin cases against Alphabet Inc.’s Google.

An antitrust suit against Apple would be the culmination of years of work and mark the fourth case that US antitrust enforcers have pursued under the Biden administration’s crackdown on technology giants. The government is also pursuing cases against Meta Platforms Inc and Amazon.com Inc.

The Justice Department and Apple declined to comment.

On Tuesday, the Supreme Court declined to hear appeals by Apple and Fortnitemaker Epic Games Inc. related to an antitrust suit over the App Store, bringing the case to a conclusion. The trial judge in that case found Apple’s App Store rules don’t violate federal antitrust law. However, she ruled the company’s limits on developer communications violated California’s state antitrust law. 

The Justice Department had weighed in at an earlier stage in the suit and was waiting for the high court’s decision before making its own move, the people said.

Enforcers have also been monitoring Apple’s moves in Europe as the bloc prepares to begin enforcing new digital gatekeeper rules on March 7. The new Digital Markets Act bars the most powerful tech firms from favoring their own services over those of rivals and companies must allow users to download apps from competing platforms. Apple’s App Store was designated as a service that falls under the law, though it’s appealing.

Apple said it expects to make changes to the App Store as a result of the bloc’s new rules despite the pending appeal.

Following the Supreme Court’s decision Tuesday, Apple said it will allow developers to use alternative payment systems, but charge a 27% fee for most digital purchases or 12% on subscriptions. Epic Games said it planned to contest Apple’s proposed remedy, saying the change was inadequate and would effectively prevent developers from reducing consumer prices.

The New York Times earlier reported on the Justice Department’s expected suit.

original URL: https://www.bloomberg.com/news/articles/2024-01-17/justice-department-to-file-apple-antitrust-case-as-soon-as-march