The Department of Justice is ready to sue Apple Inc. as early as Thursday, accusing the world’s second-largest technology company of violating antitrust laws by blocking rivals from accessing its iPhone hardware and software features.
The lawsuit, which is expected to be filed in federal court, escalates the Biden administration’s antitrust fight against most of the largest U.S. tech giants, according to people familiar with the matter. The Justice Department is already suing Alphabet Inc.’s Google for monopolization, and the Federal Trade Commission is pursuing antitrust cases against Meta Platforms Inc. and Amazon.com Inc.
Apple and the Justice Department did not immediately respond to requests for comment. The acquaintances asked not to be named as they were discussing a confidential matter.
Apple shares fell 1.4% to $176.10 in late trading on the news. They were down 7.2% this year through Wednesday’s close.
The upcoming case will be the third time the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first time the iPhone maker has been accused of illegally maintaining its dominant position.
The lawsuit comes as Apple also comes under increasing scrutiny in Europe for alleged anti-competitive behavior. The company was fined €1.8 billion this month for the closure music streaming competitors from offering cheaper offers. Apple appealed the fine and said regulators failed to find any “credible evidence of harm to consumers.”
Meanwhile, the company may face a full-scale investigation under new EU rules for big tech, the Digital Markets Act, which came into force earlier this month. Competitors are criticizing new App Store rules coming into force in Europe, complaining that the changes will likely lead to higher prices for developers. Fines for non-compliance with the new EU rules can be severe – up to 10% of a company’s annual global revenue, or up to 20% for repeat violations.
The Justice Department brought the last case in 2019 under former President Donald Trump. However, the antitrust division decided to give priority to the dual case against Google, taking a back seat because Fortnite Manufacturer: Epic Games Inc. sued Apple for monopolization in 2020, and the case was heard in the federal courts.