Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.Ought to firms be punished for handing a refund to shareholders? The Division of Justice appears to assume so. Within the midst of its landmark lawsuit towards Apple, the antitrust enforcer famous disapprovingly of the corporate’s $77bn buyback scheme in 2023: not as a result of it was a lazy deployment of capital however as an indicator of what the DoJ dubbed “anti-competitive and exclusionary” conduct.The sprawling antitrust lawsuit is the product of a five-year probe and can take years to resolve. However scrutiny can imply change earlier than both get together steps right into a courtroom. Apple’s mammoth buyback programme may very well be one casualty. Within the final fiscal yr, Apple spent twice as a lot shopping for again its personal shares because it did on R&D. Over the previous 10 years the scale of its buyback scheme dwarfs each its R&D spend and the buyback schemes from friends, including as much as a complete of $658bn, in response to information from S&P World. Alphabet’s programme, the second largest, was lower than half that at $240bn. Alphabet’s buybacks had been additionally not a lot bigger than the scale of its R&D spend over the interval. Buybacks lower share counts and flatter incomes per share figures. Within the know-how sector they’re extra common than inflexible dividends. Markets can reward their introduction and enlargement as an indication of confidence. When Uber introduced its first buyback programme final month, the share value rose 15 per cent. The DoJ case takes intention elsewhere, after all. It factors to the excessive value of smartphones, the grip Apple has over app distribution and lack of entry it offers to the iPhone working system. It seeks to show lack of competitors in markets during which Apple faces critical rivals and during which customers are in a position to swap to totally different services and products. Apple, which says the lawsuit is incorrect on information and regulation, has at all times maintained that management is integral to high quality and important to sustaining consumer privateness and safety. By evaluating the scale of Apple’s buyback programme to its R&D spending, the DoJ is highlighting what it believes is Apple’s insulation from competitors and lack of incentive to innovate — one thing it says harms shoppers. The division doesn’t, nonetheless, point out the recognition of enormous scale buyback programmes throughout the revolutionary tech sector. Apple’s inventory repurchases slowed final yr, dipping with falling income. This matched a wider development during which S&P 500 spending on buybacks fell 14 per cent on the earlier yr. However whereas the remainder of the sector is predicted to boost buybacks in 2024, Apple has purpose to carry nonetheless. elaine.moore@ft.com