Apple is under scrutiny as the US Justice Department prepares to file a lawsuit accusing the tech giant of violating antitrust laws by impeding rivals from accessing essential iPhone features.
Legal Action by US Justice Department
The impending lawsuit against Apple is part of the Biden administration’s crackdown on major US technology firms, including Google, Meta Platforms Inc., and Amazon.com Inc.
Impact on Apple
- Apple’s stock performance declined by 1.4% to $176.10 upon news of the impending lawsuit.
- The company’s shares had already fallen 7.2% year-to-date as of Wednesday’s close.
Previous Legal Challenges
This will be the third time in 14 years that Apple faces legal action from the Justice Department for alleged antitrust violations, with a focus on unlawfully maintaining its dominant position.
Regulatory Pressure in Europe
Apple is also facing regulatory scrutiny in Europe, with the company fined €1.8 billion for alleged anticompetitive practices in the music streaming industry.
EU’s Digital Markets Act
The European Union’s new regulations, the Digital Markets Act, could subject Apple to further investigation, particularly regarding App Store rules that have raised concerns about higher prices for developers.
Consequences of Non-Compliance
Non-compliance with EU regulations could lead to penalties of up to 10% of Apple’s annual worldwide revenue.
Investigation Timeline
The Justice Department began investigating Apple’s practices in 2019, initially focusing on cases against Google before expanding to include litigation with Epic Games Inc. in 2020.