Apple could be in trouble with the DOJ as an antitrust suit looms
According to Politico, a person with direct knowledge of the situation says lawyers for the United States Department of Justice are currently in the early stages of drafting up an antitrust complaint levied against Apple. This investigation has been going on for a long time now, so this would be a major sign of a climatic decision point, with an inevitable lawsuit.
Just one of many big tech companies under investigation
This insider source also says that it is various groups of prosecutors inside the DOJ who are assembling the pieces for the antitrust lawsuit, with the hopes of filing by the end of the year. However, there are no actual decisions made yet of whether or when the DOJ is going to sue Apple, which is one of the most valuable public companies in the world, the source says, along with another anonymous individual who is also familiar with the investigation. There could even be the possibility of no case filed.
However, if the case were to come to fruition, it would be just the latest in the show of legal problems facing major tech companies, including Google and Facebook. This would also be the first DOJ antitrust suit against a big tech company since President Joe Biden took office.
Apple has been under investigation by the Justice Department since 2019 with allegations that Apple has taken advantage of its own market power to stifle the competition from smaller tech companies, including not just competing hardware makers, but small app developers as well. As the investigation has progressed over the past few years, a lawsuit has become increasingly likely, so this move towards a draft is a significant step in the overall process.
The DOJ has declined to comment to Politico on the subject. Politico also reached out to Apple, Apple did not immediately respond to their request for comment.
This Apple investigation is just one of many efforts from Congress, DOJ, and the Federal Trade Commission to try and regulate the power of major tech companies, which have grown into monopolies. These big tech brands are the ones that continue to dominate the internet, social media, and even online advertising. Amazon is also under an antitrust investigation by the FTC for its retail and cloud computing businesses.
Apple’s case would be quite significant because this would be a second major battle with the tech industry at large and the DOJ. Google is already facing a litigation case with the DOJ for its search business, and it is facing the possibility of a second lawsuit for advertising. Though it’s also likely that the DOJ could not sue Google, deliberations involving how to frame a complaint make it much more plausible.
With a $2.73 trillion market cap, any fight against Apple by the DOJ will be a tough battle. Apple has plenty of resources to defend itself and its hold on the market. This is demonstrated by its willingness to litigate and protect the App Store, as shown by the trial against Epic Games, makers of Fortnite, a year ago.
A lot of the attention from the DOJ placed on Apple has focused primarily on the App Store, which is currently the only method of downloading apps and games for the best iPhone and iPad. However, the DOJ is considering going beyond the App Store and closing in on whether or not Apple’s control over its devices is actually harmful to competitors beyond software developers.
The antitrust lawsuit goes beyond just the App Store
For example, there have been public complaints filed by Tile, a Bluetooth item tracker company, ever since Apple debuted the AirTag. Tile has testified in congressional hearings that Apple made it more difficult for Tile devices to access necessary location data, as well as restricting key hardware access in the iPhone.
DOJ lawyers who are located in San Francisco, California, are leading the current probe involving Tile. They have been reaching out to companies that have a partnership with Tile in order to enable the company’s location tracking tech in its devices, according to three people who are familiar with the matter. Department officials have made it clear that both Apple’s App Store and mobile phone operating systems are currently being investigated. Politico says Tile declined to comment.
This is not the first time that Apple’s App Store has faced complaints — in fact, it has been going on for years. The biggest complaint is the fact that Apple prohibits outside payments for in-app purchases and does not allow iPhone users to download software from outside the App Store. Though many would suggest going to Google’s Android operating system to circumvent a restricted App Store, Google is also facing antitrust investigations over its own Google Play Store in both the U.S. and Europe.
All of this DOJ antitrust suit with Apple stems in part from Apple’s case against Epic. Though Epic mostly lost that case, it has since attracted DOJ prosecutors who attended those hearings.
In the Apple vs. Epic case, the federal judge had ruled that Apple is not a monopolist, but it has “unfairly restricted access to its phones and must allow third-party payment systems.” Both Apple and Epic are appealing that decision, which the 9th U.S. Circuit Court of Appeals has scheduled for late October.
With this in mind, the DOJ could be awaiting the appeals hearing to make a decision about a lawsuit. The original judge expressed that while Epic failed to prove its case, another plaintiff could.
In the meantime, the iPhone 14 will be out in just a few weeks, so we’ll be keeping busy with that while awaiting more news about the antitrust suit against Apple.