Apple faces growing likelihood of DOJ antitrust lawsuit

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The lawsuit would be the latest major legal issue facing the nation’s biggest tech companies two years after federal and several state regulators filed antitrust lawsuits against Google and Facebook. And it would be the DOJ’s first antitrust lawsuit against one of the tech titans under President Joe Biden’s administration.

The Justice Department has been investigating Apple since 2019 over allegations that it abused its market power to stifle smaller tech companies, including app developers and competing hardware makers. As the investigation progressed, a prosecution became more and more likely, but the move to drafting sections of the prosecution is a significant step forward in the process.

The DOJ declined to comment. Apple did not immediately respond to a request for comment.

The Apple investigation is part of a series of efforts by Congress, the DOJ and the Federal Trade Commission to rein in the gigantic tech companies that now dominate the global internet, social media and online advertising. The FTC is also pursuing an antitrust investigation into Amazon involving both its retail and cloud computing businesses.

The Apple case is particularly significant because it would open up a massive second battle with the DOJ’s tech industry. The Justice Department is already arguing a case against Google over its search business and preparing a second one. lawsuit for its advertising operations. While the DOJ can always decide not to prosecute, deliberations on how to frame a complaint make a case more likely.

Either case is going to be a tough fight for the DOJ, and with a market capitalization of $2.73 trillion, Apple has nearly endless resources to defend itself with. It has already shown its willingness to take legal action to protect its lucrative App Store, going to trial against Fortnite maker Epic Games last year.

To date, much of the attention on a potential Justice Department case against Apple has focused on its App Store, the only way for users to download apps on iPhones and iPads. But the case the DOJ is now considering extends far beyond the Apple-controlled payment system and high commissions that have drawn the ire of software developers for years, according to individuals.

Prosecutors are also looking into whether and how Apple’s control over its physical devices harms competitors beyond app developers. The DOJ is focusing heavily on public complaints filed by Tile, a maker of devices and technology used to find lost items, according to three people with knowledge of the government’s work. All were granted anonymity to discuss confidential meetings.

Tile trackers compete with Apple’s AirTags.

Tile has gone public with its complaints, testifying in congressional hearings that Apple made it harder for the company’s devices to access necessary location data and restricted access to key hardware components of its phones. .

DOJ attorneys in San Francisco are leading the investigation and in recent weeks have contacted companies that are partnering with Tile to enable the company’s location-tracking technology in their devices, according to the three people. In those meetings, the three people said, department officials made it clear that Apple’s App Store and mobile phone operating systems as a whole are under scrutiny. Tile declined to comment.

Complaints around Apple’s App Store have been circulating for years and focus on company policies prohibiting outside payments for in-app purchases and rules prohibiting iPhone users from bypassing the store to download software on devices. This contrasts with devices running Google’s Android operating system, which typically allow users to install apps from competing sources. Google, however, is also subject to antitrust scrutiny in the United States and Europe on its app store.

Epic Games went on trial against Apple last year over App Store restrictions on its video game Fortnite, largely losing its case but attracting the interest of DOJ prosecutors who have witnessed the legal showdown every day. three weeks.

The federal judge in the Epic case ruled that Apple was not a monopoly, but said the company unfairly restricted access to its phones and had to allow third-party payment systems. Both sides are appealing, and the 9th US Circuit Court of Appeals has scheduled a hearing for the end of October.

The timing of a potential DOJ case against the company is almost certain to be dictated at least in part by the Epic case. Justice Department officials will likely want to wait for the outcome of the appeal to help decide how to frame a possible trial. In her ruling, the trial judge specifically said that while Epic hasn’t proven its case, it’s possible that another plaintiff might.

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