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

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Apple (NASDAQ: AAPL) has yet to recover from the secular headwinds that it faces in China, which is inarguably one of its biggest and most lucrative markets, one that accounted for around 17 percent of the total revenue in the just-concluded quarter. Yet, Apple now has a fresh headache to deal with: a new antitrust lawsuit from the US Department of Justice (DOJ).

According to the reporting by Bloomberg, the DOJ might file its third antitrust lawsuit against Apple as soon as today. In a departure from the norm, this might be the first such lawsuit by the DOJ against Apple that accuses the iPhone maker of “illegally maintaining its dominant position.”

Specifically, the DOJ is expected to accuse Apple of violating antitrust laws by deliberately blocking its rivals from accessing certain hardware and software features on the iPhones, thereby placing them at a competitive disadvantage.

As far as practical implications are concerned, Wedbush’s Dan Ives does not expect this lawsuit to result in any changes to Apple’s business model for now. However, the analyst conceded that Apple will have to either settle this lawsuit or cough up cash for a hefty fine. Moreover, the iPhone maker will eventually have to find some sort of a middle-ground with developers on its ring-fenced approach to the App Store.

Meanwhile, earlier this month, the European Commission imposed a fine of nearly $2 billion on Apple for “abusing its dominant position on the market for the distribution of music streaming apps.” The Commission found that Apple prevented developers from informing users about cheaper music subscription options beyond the purview of the App Store. This decision was triggered in response to a 2019 complaint by Spotify over the iPhone maker’s “subscription restrictions” and the 30 percent cut that Apple typically receives from App Store sales.

Finally, the go-to source for contrarian investors, Jim Cramer, believes that investors will forget all about the DOJ’s lawsuit when Apple’s Vision Pro debuts on NVIDIA’s Omniverse.

Update: The DOJ has Filed the Lawsuit Against Apple

The Department of Justice’s lawsuit against the iPhone manufacturer has landed in court. According to the Financial Times, the DOJ is joined by 16 state and district attorneys who’ve collectively accused Apple of imposing contractual limitations on developers, all the while making it more difficult for users to switch devices. The lawsuit further accuses Apple of using its heft to squash innovative apps and messaging services, obstruct rival smartwatches and tap-and-pay apps, and block the development of game streaming apps. Earlier this year, the iPhone manufacturer finally abandoned its policy of booting game streaming apps from its App Store.

As another example of Apple’s “entry barriers,” the DOJ cites the failure of Amazon’s Fire phone.

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