US DOJ reportedly preparing for sweeping antitrust lawsuit against Apple

The news: The US Department of Justice is in the early stages of framing a sweeping antitrust complaint against Apple, according to Politico. It’s focusing on Apple’s tight grip on App Store and payments, business practices, and Tile’s complaints over AirTag trackers, per Reuters.

The Politico report says the DOJ, which has been investigating Apple since 2019, has not finalized its plans and is likely biding its time while waiting on the outcome of the Apple vs. Epic Games case, which is under appeal and scheduled to resume October 21.

Four possible areas of focus: The Apple investigation is one of various ongoing antitrust efforts by Congress, the DOJ, and the Federal Trade Commission (FTC) to regulate Big Tech monoliths. The DOJ has a number of potential areas to use as its tentpole arguments against Apple. 

• Apple’s tight control of its App Store, its commissions requirements from developers, and the difficulty of offering alternative app payment options. The DOJ reportedly reached out to Apple developers to build its case.
• The company’s penchant for adding features from third-party apps into its native apps and operating systems, potentially rendering competing apps and features redundant.
• Unfair competition. Tile, which makes device trackers that directly compete with Apple’s AirTags, has accused the company of using certain features like ultra-wideband technology, which Tile has no access to. 
• More clarity on Apple’s $70 billion Services segment. This is the largest business by revenue but is never broken down into its component pieces, leading to confusion from shareholders.

Why could this succeed? It’s been a year since various antitrust critics were installed to lead Big Tech investigations, and there’s mounting bipartisan pressure for results.

• Other regulators, such as those in the UK, South Korea, Japan, and the EU, have been more aggressive in homing in on Big Tech antitrust. The DOJ could represent the most decisive US attempt at regulation.
• “Outcomes may include the end of any products on the Apple roadmap that mirror the function of existing apps that are doing exceptionally well. This stops the company from finding ways to boot the competing app from its store,” said Babar Khan Javed, director of public affairs at Z2C Limited, a VC firm focused on the media supply ecosystem. 
• “Walled gardens will always be attractive for convenience and consistent user experience, so excessive fees and policing are unnecessary,” Javed said. “Pigs get fat, hogs get slaughtered."

What’s the catch? Apple could make the argument that its own apps account for a relatively small share of app usage among iPhone users and that this is the case even though some Apple apps are preinstalled to enable core functionality of the device.

This article originally appeared in Insider Intelligence's Connectivity & Tech Briefing—a daily recap of top stories reshaping the technology industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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