Apple (NASDAQ:AAPL) has sought to dismiss a lawsuit filed by the Justice Department and 15 states in March. The lawsuit alleges that the tech giant has a complete monopoly over the smartphone market, has hurt smaller rivals, and has driven up prices.
The company stated in a letter to U.S. District Judge Julien X. Neals that the iPhone maker is far from being a monopolist and faces stiff market competition. Furthermore, AAPL has stated that the U.S. Department of Justice (DoJ) relies on a new “theory of antitrust liability that no court has recognized.”
The U.S. government is expected to respond within a week to the letter.
The U.S. DoJ’s Allegations Against AAPL
The DoJ has alleged that AAPL has an illegal monopoly over the smartphone market as it imposes contractual restrictions on, and also withholds critical access to its App Store in certain cases, from developers.
Moreover, the DoJ has pointed out that the company’s iPhones are expensive, priced as high as $1,599, resulting in AAPL making much larger profits than its rivals. In addition, the Justice Department has alleged that AAPL imposes hidden charges on its business partners, including app developers, credit card companies, and even its competitors like Alphabet’s Google (NASDAQ:GOOGL). This results in raising the prices for the company’s end consumers.
Apple has rejected these allegations and has maintained that consumers or business partners unhappy with these limitations have “every incentive to switch to competitor platforms that ostensibly do not have those limitations.”
Is Apple a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 21 Buys, 11 Holds, and one Sell. Over the past year, AAPL has increased by more than 10%, and the average AAPL price target of $203.93 implies an upside potential of 6% from current levels.
