The Justice Department is reportedly in the “final stages” of filing a sweeping antitrust lawsuit against Apple – the latest sign of the growing regulatory pressure that has roiled the iPhone maker.
The DOJ could file a lawsuit against Apple in the first six months of this year, the New York Times reported Friday, citing sources familiar with the matter.
The federal government is investigating whether Apple leveraged its various hardware and software products to secure the iPhone’s dominant hold on the smartphone market.
The investigation would focus on several specific elements of the Cupertino, Calif.-based company’s business, including whether the Apple Watch works better when connected to the iPhone compared to competing smartphones, or whether Apple limits unduly competition for its iMessage text service.
Antitrust police are also studying Apple’s payment system for the iPhone and whether the company is unfairly stifling competing services offered by its rivals, the report said.
Apple shares remained stable Friday afternoon following news of a possible lawsuit – but the company’s shares fell more than 6% this week after two companies downgraded their ratings due to concerns about the sagging demand for iPhone sales.
Despite its recent struggles, Apple ranks among the most valuable technology companies in the world and last year became the first company in history to surpass a $3 trillion valuation.
While the investigation is in its final stages and senior DOJ officials are reviewing its findings, no final decision on whether to pursue legal action has been made, the statement said. report.
Agency officials reportedly met with Apple as recently as last month to discuss the situation, but have yet to hold a final meeting with company executives that would precede a filing.
Representatives for Apple and the DOJ did not immediately respond to requests for comment.
A high-profile lawsuit would pose a new headache for Apple, which is fighting a ban on selling the latest version of its smartwatch after it allegedly infringed a rival company’s patent.
A US appeals court granted Apple a temporary reprieve last month and blocked the ban while legal proceedings play out.
Apple also faced criticism on Capitol Hill over its decision to shut down an app called Beeper, which allowed Android devices to text iPhone users through iMessage. A bipartisan group of lawmakers last month asked the DOJ to investigate whether the move violated antitrust law.
As part of their investigation, DOJ officials reportedly interviewed executives at Beeper, a digital tracking company called Tile, and companies offering digital payment services.
Apple has so far managed to escape the intense regulatory scrutiny that some of its Big Tech rivals have faced.
Google is currently facing several antitrust cases, including a landmark challenge over its online search business. A decision in the case is expected later this year.
A federal jury recently ruled against Google in a major antitrust suit brought by “Fortnite” maker Epic Games and determined that the company maintained an illegal monopoly through its Android app store.
Apple avoided a similar lawsuit brought by Epic, although that case went to the U.S. Supreme Court.
The crackdown took shape in 2019 when the Justice Department began investigating big tech companies for antitrust violations.
Google’s cases were initially prioritized within the agency because under-resourced officials “lacked the financial resources and personnel to fully evaluate both companies,” the Times said, citing two officials.
The DOJ’s antitrust team would have had access to a larger budget starting in 2022.
Elsewhere, the Federal Trade Commission has targeted Meta, the parent company of Amazon and Instagram, for their business practices.
