Business Maverick

Business Maverick

Apple loses $113bn in value after regulators close in

Apple loses $113bn in value after regulators close in
Apple iPhone 14 smartphones.(Photo:Unsplash)

Regulators on both sides of the Atlantic are training their eyes on Apple Inc., unnerving investors with fears over fines and threatening its market dominance.

In the US, the Justice Department and 16 attorneys general are suing the iPhone maker for violating antitrust laws. And in Europe, the company is said to be facing probes about whether it’s complying with the region’s Digital Markets Act.

Shares of the company slid 4.1% on Thursday, erasing about $113-billion in market value and taking their year-to-date loss back to 11%. Once the world’s most valuable firm at more than $3-trillion, Apple has underperformed both the Nasdaq 100 and the S&P 500 in 2024.

It’s not the first time Apple is coming under regulatory scrutiny. The company and its peers have for years faced accusations of enriching themselves by suppressing competitors. But as Apple’s products have grown ever-more popular and established themselves as part of daily life around the world, authorities have also become more combative and wary of its power.

Read more: Apple’s 10 Biggest Challenges, From AI to Antitrust: QuickTake

The American suit, filed on Thursday in New Jersey federal court, accuses Apple of blocking rivals from accessing hardware and software features on its popular devices. The potential investigations in Europe, which are also targeting some of Apple’s rivals, will focus on the firm’s new fees, terms and conditions for app store developers.

“There comes a point in which the downpour of cases and scrutiny that comes with them become a real drag on how these companies operate,” said Bill Kovacic, an antitrust professor at George Washington University Law School. “Even if they win, in an important way they’ve lost.”

Apple fired back at the US lawsuit by calling it “wrong on the facts and the law.” It warned that the action would “set a dangerous precedent, empowering the government to take a heavy hand in designing people’s technology” and vowed to “vigorously defend against it”. The company didn’t respond to a request for comment on the potential European probes.

The US lawsuit alleges that Apple has used its power over app distribution on the iPhone to thwart innovations that would have made it easier for consumers to switch phones. The company has refused to support cross-platform messaging apps, limited third-party digital wallets and non-Apple smartwatches, and blocked mobile cloud streaming services, according to the DOJ.

It highlights five examples of technologies in which it says Apple suppresses competition: super apps, cloud streaming game apps, messaging apps, smartwatches and digital wallets. The company recently added support for cloud-based gaming services and said it would add RCS cross-platform messaging later this year.

“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 company said 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 — which lays out a series of do’s and don’ts for some of the world’s largest tech platforms — allows European Commission to levy hefty penalties of as much as 10% of a company’s total annual worldwide revenue, and up to 20% for firms who repeatedly flout the rules. After starting formal investigations into Apple — as well as Alphabet Inc.’s Google — regulators aim to wrap up their final decisions within a period of 12 months.

Apple, fresh from its €1.8-billion ($2-billion) European Union fine for blocking music streaming apps from informing users of cheaper deals, has been under heavy scrutiny since the DMA came into full effect on 7 March.


Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider
Elections24 Newsletter Banner

On May 29 2024, South Africans will make their mark in another way.

Get your exclusive, in-depth Election 2024 newsletter curated by Ferial Haffajee delivered straight to your inbox.