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Watch: DOJ Holds Press Conference On Apple Antitrust Case

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by Tyler Durden
Thursday, Mar 21, 2024 - 03:04 PM

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The Biden DOJ is preparing to announce a lawsuit against Apple on Thursday, according to Bloomberg, citing two insiders.

According to the report, Apple will be accused of violating antitrust laws by blocking rivals from accessing hardware and software features on iPhones, as well as other alleged 'breaches. '

The suit is expected to be filed in federal court in New Jersey - a sharp escalation of the Biden administration's antitrust fights against US technology titans. The administration is already suing Alphabet's Google for monopolization, while Meta and Amazon are in the crosshairs of the Federal Trade Commission over accusations of antitrust behavior.

The upcoming case will mark the third time the DOJ has sued Apple over the past 14 years, all for antitrust violations. It's the first case, however, of 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 is 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 effect 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. -Bloomberg

The latest case began in 2019, however the DOJ chose to instead prioritize two cases against Google, in order to allow a case by Fortnite maker Epic Games work its way through the courts.

According to Wedbush, Apple will eventually have to find a way to settle this case. The bank, which as a $250 price target on Apple, believes that while the DOJ lawsuit won't change Apple's business model for now. Instead, a hefty fine and some compromise with developers is ultimate in the works.

Here's what other Wall Street analysts are saying (list courtesy of Bloomberg): 

Citi (buy, PT $220)

  • "Regulatory risk is a key overhang for Apple with multiple antitrust cases around its rising Services business and pushbacks on its recently announced changes on App Store rules"
  • AI will be the next catalyst for Apple shares

Mizuho Securities

  • "This is just one in a long list of issues hanging over the stock," writes Daniel O'Regan, a managing director of equity trading

Vital Knowledge

  • "This is obviously bad news, but it's not surprising," and "a DOJ lawsuit is just one in a long list of issues hanging over the stock"

Trade accordingly...

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