The Justice Department is reportedly in the “late stages” of filing a massive antitrust lawsuit against Apple – the latest sign of mounting regulatory pressure that has roiled the iPhone maker.
The DOJ could file a lawsuit against Apple within the first six months of this year, the New York Times reported on Friday, citing sources familiar with the matter.
The feds are investigating whether Apple has leveraged its various hardware and software products to ensure the iPhone has a dominant hold on the smartphone market.
The probe is said to be focused on several specific elements of the Cupertino, Calif.-based company’s business – including whether the Apple Watch performs better when linked to the iPhone versus rival smartphones, whether Apple is improperly limiting competition for its iMessage text service.
Antitrust cops are also exploring Apple’s payments system for the iPhone and whether the company unfairly stifles rival services offered by competitors, the report said.
Apple shares were flat in Friday afternoon trading after news of the potential lawsuit surfaced – but the company’s stock has sunk more than 6% this week after a pair of firms downgraded its rating over concerns about sagging iPhone sales demand.
Despite its recent struggles, Apple ranks as the world’s most valuable tech company and last year became the first firm in history to surpass a $3 trillion valuation.
While the probe is in its final stages and top DOJ leaders are in the process of examining its findings, no final decision on whether to file a suit has been made, the report said.
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 leaders that would precede a filing.
Representatives for Apple and the DOJ did not immediately return requests for comment.
A sweeping lawsuit would mark yet another headache for Apple, which is in the process of fighting a ban on sales of the latest version of its smartwatch after it allegedly infringed on a rival company’s patent.
A US appeals court granted Apple a temporary reprieve last month and blocked the ban while the legal process plays out.
Apple has also faced heat 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 asked the DOJ last month to investigate whether the move violated antitrust law.
As part of their investigation, DOJ officials reportedly interviewed executives at Beeper, a digital tracking firm called Tile and companies that offer digital payment services.
Apple has so far managed to dodge the extensive regulatory scrutiny that some of its Big Tech rivals have faced.
Google currently faces multiple antitrust cases, including a landmark challenge of its online search business. A ruling in that case is expected later this year.
A federal jury recently ruled against Google in a major antitrust suit filed by “Fortnite” maker Epic Games and determined the company maintain an illegal monopoly through its Android app store.
Apple sidestepped a similar lawsuit filed by Epic, though that case has reached the US Supreme Court.
The crackdown took shape in 2019 when the Justice Department began investigating Big Tech firms for antitrust violations.
The Google cases were initially given precedence at the agency because officials lacked the resources “lacked the financial resources and personnel to fully evaluate both companies,” the Times said, citing two officials.
The DOJ’s antitrust team reportedly gained access to a larger budget beginning in 2022.
Elsewhere, the Federal Trade Commission has targeted Amazon and Instagram parent Meta over their business practices.