The Justice Department is reportedly in the “final stages” of a major antitrust case against Apple, the latest sign of growing regulatory pressure that is reeling the iPhone maker.
The Department of Justice could file a lawsuit against Apple within the first six months of this year. The New York Times reported Friday, citing people familiar with the matter.
Federal authorities are investigating whether Apple leveraged its various hardware and software products to give the iPhone a dominant position in the smartphone market.
The investigation is said to focus on several specific elements of the Cupertino, California-based company's business. These include whether the Apple Watch performs better when connected to an iPhone versus a competing smartphone, and whether Apple is inappropriately restricting competition in its iMessage text service. .
Antitrust police are also investigating Apple's iPhone payment system and whether the company is unfairly suppressing services offered by competitors, the report said.
Apple shares were flat in Friday afternoon trading after news of a possible lawsuit surfaced, but the company's shares rose to 6.6 this week after two companies downgraded their ratings over concerns about weak demand for iPhone sales. It fell by more than %.
Despite its recent struggles, Apple ranks as the world's most valuable technology company, and last year became the first company in history to be valued at more than $3 trillion.
The investigation is in its final stages, with top Justice Department officials reviewing the findings, but a final decision on whether to file a lawsuit has not yet been made, the report said.
According to reports, government officials met with Apple as recently as last month to discuss the situation, but have not yet held a final meeting with company executives before filing.
Representatives for Apple and the Department of Justice did not immediately respond to requests for comment.
A major lawsuit would be another headache for Apple, which is fighting to stop sales of the latest version of its smartwatch for allegedly infringing a rival's patents.
A U.S. appeals court last month granted Apple a temporary reprieve, blocking the ban pending legal proceedings.
Apple is also facing heated debate on Capitol Hill over its decision to shut down an app called Beeper that allowed Android devices to send text messages to iPhone users through iMessage. A bipartisan group of lawmakers last month asked the Justice Department to investigate whether the move violated antitrust laws.
As part of the investigation, Justice Department officials reportedly interviewed executives from Beeper, a digital tracking company called Tile, and a company that provides digital payment services.
Apple has so far managed to avoid the extensive regulatory scrutiny faced by some Big Tech rivals.
Google currently faces multiple antitrust lawsuits, including a landmark challenge to its online search business. A ruling on the matter is expected later this year.
A federal jury recently ruled against Google in a major antitrust lawsuit brought by Fortnite maker Epic Games, finding that the company maintains an illegal monopoly through its Android app store. did.
Apple avoided a similar lawsuit filed by Epic, which is still before the U.S. Supreme Court.
The crackdown took shape in 2019 when the Justice Department began investigating Big Tech companies for violating antitrust laws.
The Times reported, citing two officials, that the agency initially prioritized Google's case because the agency “lacked the funding and staffing to fully evaluate both companies.”
The Justice Department's antitrust team has reportedly gained access to a larger budget starting in 2022.
Elsewhere, the Federal Trade Commission has targeted Amazon and Instagram's parent company Meta over their business practices.
