A US federal judge on Monday rejected Apple’s bid to dismiss a government lawsuit accusing the tech giant of building illegal barriers to protect the iPhone from competition and inflate its profit margins.
US District Judge Xavier Neals of New Jersey issued a 33-page opinion that allows the antitrust lawsuit, filed by the US Justice Department 15 months ago, to move forward. He also set a timeline that could bring the case to trial in 2027, as reported by AP.
Apple had urged the court to throw out the lawsuit, arguing that the Justice Department misrepresented the smartphone market and made other legal errors.
However, Judge Neals ruled there is sufficient evidence to support the government’s market definitions and said the central allegations in the case deserve to be examined in court.
The Justice Department’s lawsuit seeks to challenge what it describes as a “walled garden” that Apple has built around its products, including the iPhone and iPad, by tightly integrating hardware and software. While Apple says this system benefits users, the government alleges it has turned into a shield against competition, enabling higher prices and stifling innovation.
The lawsuit “sets forth several allegations of technological barricades that constitute anticompetitive conduct,” Neals wrote.
He added that prosecutors had presented enough concerns to raise the “dangerous possibility” that Apple has turned the iPhone into an illegal monopoly.
In response, Apple maintained its stance, saying, “The Justice Department's case is wrong on the facts and the law, and we will continue to vigorously fight it in court.”
The antitrust lawsuit is one of several legal challenges facing the California-based company, which reported $94 billion in profits on $295 billion in sales during its last fiscal year ending in September.
In April, a federal judge issued a civil contempt order barring Apple from collecting fees on in-app transactions processed through alternatives to its proprietary payment system, which previously charged commissions of 15% to 30%.
Apple is also facing the possible loss of more than $20 billion in annual payments it receives for setting Google as the default search engine on its devices. That issue is part of a separate Justice Department antitrust case against Google, with a Washington, D.C. judge expected to rule on proposals to disrupt Google’s search monopoly.
Neals' decision on Monday came as Apple was also hit with a lawsuit from app developer Proton, echoing the allegations of anti-competitive conduct. Proton’s lawsuit seeks class-action status on behalf of thousands of app developers, punitive damages against Apple, and a court order to dismantle the company’s walled garden.
BP English/ARK
