Apple Inc. and the US Justice Department are in early-stage discussions to settle the 2024 antitrust lawsuit that threatens the iPhone maker's App Store business model, people familiar with the matter said.
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Apple, DOJ hold early settlement talks in 2024 antitrust lawsuit
Apple Inc. and the US Justice Department are in early discussions to settle a 2024 antitrust lawsuit, with the iPhone maker having submitted multiple settlement proposals this year, people familiar with the matter said.
"The discussions are active, though there is no guarantee the two sides will reach an agreement," said one of the people, who asked not to be identified discussing private negotiations.
No trial date has been set in the case, which alleges Apple violated antitrust laws by restricting competition through its iPhone ecosystem. The DOJ's lawsuit targets Apple's control over app distribution and its commission on in-app purchases, practices that generate billions of dollars in annual services revenue.
A settlement could remove a major regulatory overhang on Apple's stock by preserving its App Store revenue model, while a failure to reach terms would leave the company facing a protracted legal battle that could force structural changes to its most profitable business lines.
The Broader Crackdown
The Apple case is part of a broader antitrust push by the DOJ targeting the largest technology companies. The department has also pursued cases against Alphabet Inc.'s Google over search monopoly allegations and Meta Platforms Inc. over social media market power. A federal judge ruled against Google in August 2024, a decision the company is appealing.
What's at Stake for Apple
Services revenue, which includes App Store commissions, has become Apple's primary growth driver as iPhone sales mature. A settlement that preserves the current commission structure would protect a key profit center, while a trial loss could force Apple to allow alternative app stores and payment systems on its devices.
The DOJ's case goes further than the Epic Games litigation, alleging that Apple's anticompetitive conduct spans smartphones, smartwatches, and digital advertising. A loss at trial could expose Apple to remedies including forced interoperability with competing devices.
This article is for informational purposes only and does not constitute investment advice.
