Apple Must Face DOJ Lawsuit Over “Walled Garden”

Apple Must Face DOJ Lawsuit Over “Walled Garden” \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ A New Jersey federal judge denied Apple’s request to dismiss the DOJ antitrust lawsuit, allowing claims over its “walled‑garden” smartphone policies to advance. The 33‑page ruling by Judge Xavier Neals paves the way for a trial expected in 2027. Apple continues to face multiple legal challenges, including litigation over App Store fees and its Google search deal.

Quick Looks

• Court Decision: Judge Xavier Neals declined to dismiss the DOJ antitrust lawsuit in New Jersey.
• Market Definition: The judge upheld DOJ’s definition of Apple’s control over smartphones and app stores.
• Walled Garden: Alleged as a barrier to competition that permits Apple to overcharge and restrict innovation.
• Potential Trial: The lawsuit is on track for a 2027 trial timeline.
• Legal Pressure: Additional suits from app developers and rulings challenge Apple’s app‑store fees and Google deal.

Deep Look

In a major development with wide-reaching implications for tech industry regulation, U.S. District Judge Xavier Neals ruled on Monday that the U.S. Justice Department’s antitrust lawsuit against Apple Inc. can proceed, rejecting Apple’s attempt to dismiss the case. The lawsuit, filed over a year ago, accuses Apple of erecting a sophisticated web of technological and contractual barriers—referred to as a “walled garden”—to illegally protect the dominance of its iPhone ecosystem and maximize profits at the expense of consumers and competitors.

Judge Neals’ 33-page opinion, delivered in a New Jersey courtroom, dismissed Apple’s assertion that the DOJ had distorted market realities and misapplied antitrust principles. Apple argued that its tight integration of hardware and software improves user experience and that the Justice Department had failed to account for the competitiveness of the broader smartphone market. However, Neals sided with federal prosecutors, concluding that the DOJ presented sufficient preliminary evidence to suggest that Apple’s business practices may violate U.S. antitrust law. He further noted that Apple’s alleged conduct poses a “dangerous possibility” of monopoly abuse in the smartphone and app distribution markets.

The heart of the government’s case is Apple’s so-called “walled garden”—the closed system that integrates iPhones, iPads, and the iOS App Store, preventing or limiting interoperability with non-Apple software and services. While Apple maintains that this model ensures security, performance, and user satisfaction, the Justice Department claims it has evolved into an exclusionary mechanism that shuts out competitors, imposes excessive fees, and stifles innovation. Judge Neals highlighted several “technological barricades” as potential evidence of anticompetitive behavior and deemed the allegations strong enough to warrant a full trial.

Unless settled or dismissed in a later phase, the lawsuit is now on track to go to trial in 2027, setting the stage for one of the most consequential antitrust showdowns in modern tech history.

Apple responded swiftly to the ruling, issuing a statement reiterating its stance that the lawsuit is legally flawed and factually incorrect. “We believe the court will ultimately find in our favor,” the company stated, signaling its intention to continue a vigorous defense in court.

But the DOJ’s antitrust case is just one of several legal fronts that could impact Apple’s nearly $100 billion in annual profits. In April, a separate federal ruling issued a civil contempt order barring Apple from collecting commissions on in-app transactions processed through third-party systems—a critical blow to the company’s App Store revenue model. Previously, Apple had imposed commission rates between 15% and 30% on app developers for such transactions, a practice now under increasing legal scrutiny.

Additionally, Apple may lose a multi-billion-dollar annual payment from Google, which pays Apple an estimated $20 billion per year to remain the default search engine on iPhones and other devices. This deal, now at the center of another DOJ-led antitrust trial in Washington D.C., could be banned if the court finds Google’s arrangements with Apple contribute to illegal search engine dominance.

Meanwhile, Monday’s legal blow was compounded by fresh allegations from app developer Proton, known for its privacy-centric ProtonMail service. Proton filed a new class-action lawsuit that mirrors many of the Justice Department’s arguments, alleging Apple leverages its App Store to restrict competition and overcharge developers. The class-action status could ultimately involve thousands of developers, collectively seeking punitive damages and demanding a judicial order to dismantle Apple’s app ecosystem restrictions.

Taken together, these legal challenges present an unprecedented threat to Apple’s carefully curated digital empire. With multiple lawsuits underway and regulators sharpening their focus, Apple faces mounting pressure to defend its longstanding business strategies that have shaped the mobile technology landscape for over a decade.

As Judge Neals’ ruling propels the DOJ’s antitrust case closer to trial, the outcome could significantly reshape how major tech platforms operate—and how much control they exert over both users and competitors in the digital economy.

More on Business News