Technology

Apple shares slip on report U.S. government preparing antitrust lawsuit

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Apple CEO Tim Cook listens as President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House in Washington, D.C., June 23, 2023.
Anna Moneymaker | Getty Images

Apple shares slid less than 1% during trading on Friday after The New York Times reported that the Justice Department is preparing an antitrust lawsuit against the iPhone maker, which could be filed as soon as this year.

The agency’s lawsuit could target how the Apple Watch works exclusively with the iPhone, as well as the company’s iMessage service, which is also solely available on Apple devices. It could also focus on Apple Pay, the company’s payments system, according to the report.

The lawsuit, if it comes to pass, would be the biggest antitrust risk for Apple in years. The U.S. is Apple’s largest market, and Apple says that the way in which iMessage and the Apple Watch work are essential features that distinguish iPhones from Android phones.

The news comes as investors and analysts have started to fret about the various regulatory risks facing Apple, including new regulations in Europe over the company’s App Store’s control over iPhone software distribution, as well as a recent DoJ trial targeting Google’s search deals, including its lucrative arrangement with Apple.

“While Apple’s share price increased by 48% in 2023, our concerns regarding Apple’s legal risks have intensified in recent months,” CFRA analyst Nick Rodelli wrote in a note on Friday.

Apple CEO Tim Cook will meet with the European Commission’s top antitrust enforcer, Margrethe Vestager, next Thursday.

A representative for Apple declined to comment. The Department of Justice did not immediately return requests for comment.

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