Shares in US tech giant Apple Inc. declined at the close on Thursday after the US Department of Justice (DOJ) confirmed its lawsuit against the company for illegal monopoly over smartphones.
The iPhone maker’s stock ended the session with a 4.09% loss following the news and was trading 0.19% higher in the after-market.
The Justice Department’s lawsuit has led the firm to shed $113 billion in market value and return its year-to-date loss to 11%. Its shares have also had a lackluster performance in the Nasdaq 100 and S&P 500 indexes so far this year.
Apple Faces New DOJ Antitrust Lawsuit for Illegal Monopoly
The DOJ, along with 17 states, hit Cupertino-based Apple with a new antitrust lawsuit on Thursday, accusing the firm of using restrictive measures for its App Store that require consumers to pay more and hinder developers’ ability to launch products on other smartphone systems.
Attorney General Merrick Garland said consumers should not be charged with higher fees as companies breach antitrust rules.
The iPhone maker will only continue monopolizing the smartphone market if its practices remain unquestioned, Garland added.
The legal complaint, the third from the Justice Department in 14 years, primarily alleges Apple of having an illegal monopoly through contractual limits and a prohibition on developers’ critical access.
The company has purportedly employed anticompetitive tactics to impede the progress of other apps, block mobile cloud streaming services, bar certain messaging platforms, and weaken the functionality of other smartwatches.
While Apple’s dominance is evident, and its market cap is higher than the gross domestic product (GDP) of over 100 countries, Garland said its success was not due to its excellent product offerings.
Rather, he claimed that it was because of exclusionary’ methods that were purportedly aimed at ‘making other products worse.’
The company has denied the allegations, stating that the government was overreaching, and it intends to strongly defend against the lawsuit.
According to analysts, the antitrust case was more of a headline risk than a financial risk in the country. They also saw a low likelihood of Apple making significant changes to the way it charges fees on the App Store or its policies for third-party app stores without a new rule being imposed.
The iPhone maker is the latest tech titan to be sued by the US watchdogs, following Meta Platforms Inc., Alphabet Inc.’s Google LLC, and Amazon.com Inc.
