Apple in Crosshairs: Potential DOJ Antitrust Lawsuit Looms

The New York Times reports that Apple may soon become the target of a federal antitrust lawsuit as the US Department of Justice (DOJ) is reportedly in the advanced stages of investigating the tech giant’s practices aimed at retaining customers within its ecosystem.

The potential lawsuit is expected to target specific aspects of Apple’s ecosystem, including the exclusive integration of the Apple Watch with iPhones and the limited availability of the iMessage service solely on Apple devices. Additionally, the DOJ is reportedly eyeing Apple Pay, the company’s proprietary payments system, as part of its investigation into potential anticompetitive practices.

If the lawsuit materializes, it could pose the most significant antitrust challenge for Apple in years. The United States stands as Apple’s largest market, and the company has consistently emphasized the unique features of its products, such as the integration of iMessage and the Apple Watch, as differentiators from Android competitors.

Read more: Apple Battles Subpoenas In US Court Against Qualcomm

Investors and analysts have been growing increasingly concerned about the mounting regulatory risks faced by Apple. This includes recent regulatory actions in Europe, where authorities are scrutinizing the control exerted by Apple’s App Store over the distribution of iPhone software. Furthermore, the ongoing Justice Department trial targeting Google’s search deals, including a lucrative arrangement with Apple, has added to the apprehension surrounding Apple’s legal landscape.

“While Apple’s share price witnessed a remarkable 48% increase in 2023, our concerns regarding Apple’s legal risks have intensified in recent months,” noted CFRA analyst Nick Rodelli in a statement released on Friday.

In an effort to address these concerns, Apple CEO Tim Cook is scheduled to meet with Margrethe Vestager, the European Commission’s top antitrust enforcer, next Thursday. The meeting is expected to provide insights into Apple’s approach to antitrust matters, especially in the wake of potential legal challenges in the U.S. and ongoing regulatory scrutiny in Europe.

As the tech giant braces for possible legal battles on multiple fronts, the outcomes of these antitrust investigations could have far-reaching implications for Apple’s market position, product ecosystem, and overall business strategy in the coming months. Investors and industry observers will closely monitor these developments as they unfold.

Source: CNBC