The Department of Justice Files a Third Antitrust Lawsuit Against Apple for ”Illegally Maintaining Its Dominant Position” and Causing Amazon’s Fire Phone to Fail Among Others

The Department of Justice Files a Third Antitrust Lawsuit Against Apple for ”Illegally Maintaining Its Dominant Position” and Causing Amazon’s Fire Phone to Fail Among Others

This is not intended as investment advice. The author does not hold any positions in the stocks mentioned.

Despite being one of its largest and most profitable markets, China continues to pose significant challenges for Apple (NASDAQ: AAPL), as it struggles to overcome the ongoing secular headwinds. In fact, China accounted for approximately 17 percent of Apple’s total revenue in the most recent quarter, according to a report from Fast Company. And now, on top of those difficulties, Apple is facing a new obstacle: a recently filed antitrust lawsuit from the US Department of Justice (DOJ).

It has been reported by Bloomberg that the Department of Justice (DOJ) may file its third antitrust lawsuit against Apple today. This would be a deviation from the usual practice as it would be the first time the DOJ has filed a lawsuit against Apple, accusing them of “illegally maintaining its dominant position,”according to a tweet by @thudderwicks.

The DOJ is poised to allege that Apple intentionally impeded its competitors from utilizing specific hardware and software functionalities on the iPhone, resulting in a competitive disadvantage and a potential violation of antitrust laws.

Despite the potential practical implications, according to Wedbush’s Dan Ives, this lawsuit is not expected to bring about any immediate changes to Apple’s business model. However, the analyst acknowledged that Apple will either need to reach a settlement or pay a substantial fine. Furthermore, the iPhone maker will ultimately need to find a compromise with developers regarding its exclusive approach to the App Store.

Recently, the European Commission fined Apple almost $2 billion for “exploiting its dominant market position in the distribution of music streaming apps.”According to the Commission, Apple prohibited developers from informing users about more affordable music subscription alternatives that were not available on the App Store. This ruling was a result of a complaint filed by Spotify in 2019 regarding Apple’s “subscription limitations”and their standard 30 percent share of App Store profits.

Ultimately, Jim Cramer, a trusted resource for investors who take a contrary stance, is confident that the release of Apple’s Vision Pro on NVIDIA’s Omniverse will overshadow the DOJ’s lawsuit.

DOJ Files Lawsuit Against Apple Over Alleged Antitrust Violations

The Department of Justice has taken its lawsuit against the manufacturer of iPhones to court, as reported by the Financial Times. The DOJ has been joined by 16 state and district attorneys who have accused Apple of restricting developers through contractual limitations, while also creating barriers for users looking to switch devices. The lawsuit also alleges that Apple has used its dominant position to suppress new apps and messaging services, hinder rival smartwatches and tap-and-pay apps, and prevent the growth of game streaming apps. In a recent development, the iPhone manufacturer has finally ended its practice of banning game streaming apps from its App Store.

The DOJ also points to the failure of Amazon’s Fire phone as evidence of Apple’s “entry barriers.”

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