Justice Department to Sue Apple for Antitrust Violations as Soon as Thursday

(Bloomberg) — The Justice Department is poised to sue Apple Inc. as soon as Thursday, accusing the world’s second most valuable tech company of violating antitrust laws by blocking rivals from accessing hardware and software features of its iPhone.

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The suit, which is expected to be filed in federal court, according to people familiar with the matter, escalates the Biden administration’s antitrust fights against most of the biggest US technology giants. The Justice Department is already suing Alphabet Inc.’s Google for monopolization, while the Federal Trade Commission is pursuing antitrust cases against Meta Platforms Inc. and Amazon.com Inc.

Apple and the Justice Department didn’t immediately respond to requests for comment. The people familiar asked not to be named discussing a confidential matter.

Apple shares fell as much as 1.4% to $176.10 in late trading on the news. They had been down 7.2% this year through Wednesday’s close.

The coming case will mark the third time that the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first case accusing the iPhone maker of illegally maintaining its dominant position.

The lawsuit comes as Apple also is coming under increasing scrutiny in Europe over alleged anticompetitive behavior. The company was hit with a €1.8 billion fine this month for shutting out music streaming rivals from offering cheaper deals. Apple’s appealing the penalty and has said that regulators failed to uncover any “credible evidence of consumer harm.”

Meanwhile, the company may face a full-blown investigation under the EU’s new rules for Big Tech — the Digital Markets Act — which went into force earlier this month. Rivals have dinged new App Store rules that came into force in Europe, complaining that changes are likely to result in higher prices for developers. Penalties for failing to comply with the EU’s new rules can be severe – as much as 10% of a company’s annual worldwide revenue or up to 20% for repeat offenders.

The Justice Department opened the latest case in 2019 under former President Donald Trump. The antitrust division, though, chose to prioritize twin cases against Google, taking a back seat as Fortnite maker Epic Games Inc. sued Apple for monopolization in 2020 and that case worked its way through the federal courts.

–With assistance from Samuel Stolton.

(Updates with shares, additional details.)