Apple hit back at the U.S. lawsuit, saying it was “wrong as a matter of fact and law.”
Regulators on both sides of the Atlantic are keeping a close eye on Apple, leaving investors worried about fines and threats to its market dominance.
In the United States, the Justice Department and 16 attorneys general are suing the iPhone maker for antitrust violations. In Europe, the company is said to be facing an investigation into its compliance with the region’s Digital Markets Act.
The company’s shares fell 4.1% on Thursday, wiping out about $113 billion in market value and pulling back 11% of its year-to-date losses. Apple, once the world’s most valuable company with a market capitalization of more than $3 trillion, has lagged behind the Nasdaq 100 and S&P 500 by 2024.
This isn’t the first time Apple has come under regulatory scrutiny. The company and its peers have faced accusations for years of seeking personal gain by suppressing rivals. But as Apple products have grown in popularity and become part of daily life around the world, authorities have become more combative and wary of their power.
The U.S. lawsuit, filed Thursday in federal court in New Jersey, accuses Apple of blocking rivals from accessing hardware and software features on its popular devices. The potential investigation in Europe, which also targets some of Apple’s rivals, will focus on the company’s new fees, terms and conditions for App Store developers.
“There comes a point where the sheer volume of cases and the scrutiny that comes with them really puts a strain on the way these companies operate,” said Bill Kovacic, an antitrust professor at George Washington University Law School. To a large extent they still lost.”
Apple hit back at the U.S. lawsuit, saying it was “wrong as a matter of fact and law.” It warned that the action would “set a dangerous precedent that would allow governments to take draconian measures when designing human technology” and vowed to “defend vigorously”. The company did not respond to a request for comment on a potential European investigation.
The U.S. 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. The company refused to support cross-platform messaging apps, restricted third-party digital wallets and non-Apple smartwatches, and blocked mobile cloud streaming services, according to the Justice Department.
It highlights five examples of technology that Apple uses to suppress 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 will add RCS cross-platform messaging later this year.
“At Apple, we innovate every day to make technology people love—designing products that work together seamlessly, protect people’s privacy and security, and create great things for our users,” the company said in a statement. A magical experience.” “This lawsuit threatens our identity and the principles that make Apple products stand out in a fiercely competitive market.”
The Digital Markets Act sets out a series of dos and don’ts for some of the world’s largest tech platforms, allowing the European Commission to impose stiff penalties on companies of up to 10% and up to 20% of global annual gross revenue. % For companies that repeatedly violate the rules. Regulators plan to make a final decision within 12 months after opening formal investigations into Apple Inc. and Alphabet Inc.’s Google.
Apple, which was fined 1.8 billion pounds ($2 billion) by the European Union for preventing music streaming apps from notifying users of cheaper deals, has been under intense scrutiny since the DMA came into full effect on March 7.
