Tim Cook led Apple has seen its valuation take a hit, shedding $113 billion in market value on Thursday, showing an 11% year to date decline as regulatory pressures intensified, prompting concerns among investors about potential fines and its market dominance.
Regulators in both the United States and Europe have turned their focus towards Apple Inc., with the Justice Department and 16 attorneys general in the US suing the tech giant for alleged antitrust violations, while in Europe, probes are underway regarding the company’s compliance with the Digital Markets Act.
Shares of Apple plummeted by 4.1% on Thursday, March 21, 2024, marking a significant loss and bringing its year-to-date decline to 11%.
Once hailed as the world’s most valuable firm, with a market cap surpassing $3 trillion, Apple’s performance in 2024 has lagged behind both the Nasdaq 100 and the S&P 500 indices.
Recommended reading: U.S. DOJ, 16 states sue Apple over anti-competitive practices
What we know
This latest regulatory scrutiny is not unfamiliar territory for Apple, as the company and its industry peers have long faced accusations of anti-competitive behavior.
However, the escalation of regulatory actions coincides with Apple’s products becoming increasingly pervasive in daily life globally, leading authorities to adopt a more vigilant stance against its market dominance.
In the US, the lawsuit filed in New Jersey federal court accuses Apple of stifling competition by restricting rivals’ access to hardware and software features on its devices.
Similarly, the potential European investigations are set to scrutinize Apple’s new fees, terms, and conditions for app store developers, alongside its competitors.
In response to the US lawsuit, Apple defended itself, asserting that the allegations were unfounded and pledging to vigorously challenge the legal action. However, the company refrained from commenting on the potential European probes.
What you should know
The US lawsuit contends that Apple’s control over app distribution on iPhones has hindered innovations that could enhance consumer choice.
- It cites examples of technologies where Apple is accused of stifling competition, including messaging apps, smartwatches, digital wallets, and cloud streaming game apps.
- The looming regulatory actions in Europe, particularly under the Digital Markets Act, pose significant financial risks for Apple, with penalties potentially reaching up to 10% of its total annual worldwide revenue.
Amidst these challenges, Apple has been under heightened scrutiny since the DMA came into full effect earlier in March, following a substantial fine imposed by the European Union for anticompetitive behavior related to music streaming apps.
Recommended reading: EU slams €1.8 billion fine on Apple over App Store rules
