The iPhone manufacturer is being accused in the United States of breaking antitrust laws by the Justice Department and sixteen attorneys general.
Apple’s market value drops by $113 billion.
Authorities are focusing their attention on Apple Inc. from both sides of the Atlantic, which is concerning investors since they may face fines and may lose their dominant position in the market.
The iPhone manufacturer is being sued in the United States for breaking antitrust laws by the Justice Department and sixteen attorneys general. Additionally, it’s said that the corporation is being investigated in Europe for possible violations of the Digital Markets Act in the area.
The company’s shares fell 4.1% on Thursday, wiping away almost $113 billion in market value and increasing their loss for the year to 11%. At more than $3 trillion, Apple used to be the most valuable company in the world, but in 2024, it lagged the S&P 500 and the Nasdaq 100.
Apple has previously been the subject of a regulatory investigation. For years, the business and its contemporaries have been accused of benefiting themselves by stifling other businesses. However, authorities have also grown more hostile and cautious of Apple’s authority as its products have become more and more well-known and integrated into everyday life worldwide.
The American lawsuit claims Apple is preventing competitors from using hardware and software features on its well-known gadgets. It was filed on Thursday in a federal court in New Jersey. The company’s new fees and terms and conditions for app store developers will be the subject of possible European probes, which are also aimed at some of Apple’s competitors.
“At some point, the deluge of cases and the ensuing scrutiny become a real drag on these companies’ operations,” stated Bill Kovacic, a professor of antitrust at George Washington University Law School. “Even if they win, in an important way they’ve lost.”
In retaliation, Apple declared that the US case was “wrong on the facts and the law.” It pledged to “vigorously defend against it” and issued a warning that the move would “set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.” When asked for a statement about the possible European investigations, the business remained silent.
According to the US complaint, Apple has allegedly resisted developments that would have made it simpler for customers to transfer phones by abusing its control over iPhone app distribution. The DOJ claims that the corporation has restricted access to non-Apple wearables and third-party digital wallets, prohibited mobile cloud streaming services, and refused to enable cross-platform chat apps.
It cites five instances of technologies—super apps, messaging apps, wearables, digital wallets, and cloud streaming gaming applications—in which it claims Apple stifles competition. The business said that it will include cross-platform RCS communications later this year and has just introduced support for cloud-based gaming services.
“At Apple, we innovate every day to make technology people love – designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the business stated in a statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
The Digital Markets Act permits the European Commission to impose severe fines of up to 10% of a company’s total annual worldwide sales, and up to 20% for companies that consistently break the regulations. The act lays out some dos and don’ts for some of the biggest internet platforms in the world. Within a year after beginning official investigations into Alphabet Inc.’s Google and Apple, regulators want to have made their final rulings.
Since the DMA went into full force on March 7, Apple has been under intense scrutiny. This is coming after the company was fined 1.8 billion pounds ($2 billion) by the European Union for preventing music streaming applications from alerting consumers to lower prices.
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