Judge OKs Antitrust Against A 07/01 06:42

   

   (AP) -- A federal judge on Monday rebuffed Apple's request to throw out a 
U.S. government lawsuit alleging the technology trendsetter has built a maze of 
illegal barriers to protect the iPhone from competition and fatten its profit 
margins.

   The 33-page opinion from U.S. District Judge Xavier Neals in New Jersey will 
enable an antitrust lawsuit that the U.S. Justice Department filed against 
Apple 15 months ago to proceed. Neals has set a timetable that could see the 
case come to trial in 2027.

   Apple has sought to dismiss the lawsuit, arguing the Justice Department had 
distorted the contours of the smartphone market and made a series of other 
misinterpretations that warranted the case be thrown out.

   But Neals decided there is enough evidence to support the Justice 
Department's market definitions and concluded the case's key allegations 
merited further examination at trial.

   The case seeks to pierce the digital fortress that Apple Inc., based in 
Cupertino, California, has built around the iPhone, iPad and other products to 
create a so-called "walled garden" allowing its hardware and software to mesh 
seamlessly for users.

   The Justice Department alleges that walled garden has mostly turned into a 
shield against competition, creating market conditions that enable it to charge 
higher prices and stifle innovation.

   The lawsuit "sets forth several allegations of technological barricades that 
constitute anticompetitive conduct," Neals wrote in his opinion. The judge also 
concluded the Justice Department had pointed toward enough areas of troubling 
conduct that raised the "dangerous possibility" that Apple has turned the 
iPhone into an illegal monopoly.

   In a Monday statement, Apple reiterated its position that 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 isn't the only legal headache threatening to undercut 
its profits, which totaled $94 billion on sales of $295 billion in its fiscal 
year ending last September.

   Another federal judge in April issued a civil contempt order banning Apple 
from collecting any fees from in-app transactions on the iPhone that are 
funneled through other options besides its once-exclusive payment processing 
system that charged commissions ranging from 15% to 30%.

   Apple also could lose a more than $20 billion annual payment that it gets 
for making Google the default search tool on the iPhone and other products as 
part of another antitrust case brought by the Justice Department. A federal 
judge in Washington D.C. is considering whether to ban the deals with Apple as 
part of a shake-up being proposed to address Google's illegal monopoly in 
search.

   Neals' decision to allow the Justice Department's antitrust case to proceed 
came on the same day that Apple was hit with a lawsuit by app maker Proton 
amplifying the accusations of wrongful conduct by the company. The lawsuit, 
which will seek to be certified as a class action presenting thousands of 
developers who have made iPhone apps, is asking for punitive damages against 
Apple, as well as a court order to dismantle its walled garden.