(Bloomberg) — Apple Inc. lost its bid to throw out an antitrust case brought by the US Justice Department and a group of state attorneys general on Monday, a victory for the aggressive posture taken during the Biden administration and carried on by enforcers under President Donald Trump.
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The lawsuit is an existential threat to Apple and could upend its highly lucrative mobile hardware business. The iPhone maker is accused of violating antitrust laws by blocking rivals from accessing hardware and software features on its popular devices. The government claims Apple has used its power over app distribution and the iPhone’s features to thwart innovations that would have made it easier for consumers to switch phones.
‘Monopoly Power’
In this early stage of the case, “allegations of this nature, which indicate that Apple acts in a manner to protect its monopoly power in the smartphone and performance smartphone market, are sufficient,” US District Judge Julien Xavier Neals in New Jersey wrote in a 33-page ruling.
Neals also said the allegations about Apple’s intent to monopolize the smartphone market are strong enough to continue. The “complaint includes numerous statements allegedly made by Apple executives regarding the barriers set in place to maintain its monopoly.”
DOJ representatives declined to comment. Apple didn’t immediately respond to a request for comment.
The ruling tees up years of litigation. Neals has not yet set a trial date, but antitrust cases can take years to resolve, including appeals. The DOJ sued Alphabet Inc.’s Google over its search business in October 2020, with a judge ruling four years later the company violated the law.
Apple could still seek to settle the case — filed in March 2024 — with the Trump administration, though the Justice Department’s new antitrust head, Gail Slater, said at her confirmation hearing that she plans to largely continue the strict enforcement of her predecessors.
In addition to the Google search suit, the US has targeted Google’s advertising technology business as well as Visa Inc., Live Nation Inc. and Thoma Bravo-backed real estate software company RealPage Inc.
Apple’s Argument
In a November hearing, lawyers for Apple urged Neals to toss the case because it failed to state how the iPhone maker’s alleged monopoly has harmed any consumers or developers.
