The Dow Jones Industrial Average (DJINDICES:^DJI) was up 0.4% at 11:40 a.m. EDT Friday as investors continued to push up stocks despite mixed messages on the economy. Thursday's unemployment report was worse than expected, painting a picture of continued job losses even as the economy begins to rebound. In some states, including Florida, Texas, and Arizona, cases of COVID-19 are exploding now that lockdown measures have been eased.

Shares of Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) rode the stock market higher on Friday. Apple stock received a price target bump from an analyst, but the big news was Microsoft's president calling on antitrust regulators to target Apple's App Store empire.

A book titled Antitrust Law.

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Microsoft wants antitrust regulators to go after Apple

About 20 years ago, Microsoft was sued by the Department of Justice for violating antitrust law. The tech giant was accused of illegally protecting its operating system monopoly and attempting to carve out a monopoly for its Internet Explorer web browser. The government won the case, although Microsoft was not broken up.

Today, tech giants other than Microsoft are facing antitrust scrutiny. And in the case of Apple, Microsoft is one of the companies doing the accusing. At an event hosted by Politico on Thursday, Microsoft's president, Brad Smith, called on antitrust regulators in the U.S. and Europe to focus on app stores that extract heavy fees from developers. A Microsoft spokesperson confirmed to Bloomberg that Smith was talking about Apple.

The fundamental issue is this: The only way to distribute software on Apple's iOS platform, which powers the iPhone and iPad, is through Apple's App Store. Apple takes a fee ranging from 15% to 30% on all purchases through the App Store. That includes recurring subscription purchases, such as Microsoft Office 365. Apple's rules also prevent developers in many cases from pointing users to a website to complete their purchase in an effort to avoid the fee.

Smith argued that Apple's App Store creates a far higher barrier to fair competition and access than Microsoft Windows did when the company lost its antitrust suit two decades ago. In some cases, Apple's own apps compete with third-party apps, putting those third-party apps at a distinct disadvantage. Spotify, which goes up against Apple Music, is a prime example.

If Apple is eventually sued for antitrust violations, it could be forced to either stop charging fees or allow developers to distribute apps on its platforms in other ways. That would hit Apple's services business, which is one of its key growth engines.

Microsoft stock was up about 0.7% by late Friday morning, while Apple stock was up roughly 0.5%. Both stocks are close to their respective 52-week highs.

Another price-target bump for Apple

While Apple's App Store policies are coming under scrutiny, analysts are growing increasingly optimistic about the company's prospects. Earlier this week, RBC raised its price target on Apple stock due to the company's buyback program and the expectation of improving macroeconomic conditions. On Friday, Jefferies bumped up its price target on optimism about Apple's upcoming 5G iPhones.

Jefferies raised its Apple price target from $370 to $405, maintaining a buy rating. The investment bank has become more optimistic about the next iPhone product cycle. Jefferies expects Apple to be able to maintain its iPhone pricing relative to last year, which will drive strong gross margin performance.

It's unclear how strong demand will be for pricey new iPhones later this year, given that the economy is unlikely to have fully recovered from the pandemic by then. If a second wave of the virus hits in the winter, demand for iPhones could very well fall off a cliff.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.