Regulators on both sides of the Atlantic are looking at Apple Inc., unnerving investors with fears about fines and threatening its market dominance.
In the US, the Department of Justice and 16 attorneys general are suing the iPhone maker for violating antitrust laws. And in Europe, the company is said to face investigations into whether it is complying with the EU Digital Markets Act.
The company’s shares fell 4.1% on Thursday, wiping out about $113 billion in market value and bringing its year-to-date loss to 11%. Once the world’s most valuable company worth more than $3 trillion, Apple has underperformed the Nasdaq 100 and the S&P 500 in 2024.
This isn’t the first time Apple has come under regulatory scrutiny. The company and its peers have for years faced accusations of enriching themselves by suppressing competitors. But as Apple products have become increasingly popular and established themselves as part of everyday life around the world, authorities have also become more combative and wary of their power.
The American lawsuit, filed Thursday in New Jersey federal court, accuses Apple of blocking rivals’ access to hardware and software features in its popular devices. The investigations in Europe, which also target some of Apple’s rivals, will focus on the company’s new fees, terms and conditions for app store developers.
Apple responded to the lawsuit in the US, calling it “wrong on the facts and the law.” It warned that the action would “set a dangerous precedent, enabling the government to exert a heavy hand in designing people’s technology” and promised to “vigorously defend against it.”
The US lawsuit alleges that Apple used its power over iPhone app distribution to block innovations that would have made it easier for consumers to switch phones.
He highlights five examples of technologies where he claims Apple suppresses competition: super apps, cloud streaming gaming apps, messaging apps, smartwatches and digital wallets. The company recently added support for cloud-based gaming services and said it would add cross-platform RCS messaging later this year.
In the EU, the Digital Markets Act allows the European Commission to impose heavy penalties of up to 10% of a company’s total annual worldwide revenue, and up to 20% for companies that repeatedly flout the rules. After launching formal investigations into Apple — as well as Alphabet Inc.’s Google — regulators aim to complete their final decisions within a 12-month period.
Apple, which just received a 1.8 billion euro ($2 billion) fine from the European Union for preventing music streaming apps from telling users about cheaper deals, has been under heavy scrutiny since the Digital Markets Law in force on March 7th.
2024-03-22 23:56:10