Regulatory bodies in the US and Europe are focusing on Apple Inc. (AAPL), stirring investor concerns over potential fines and questioning the company's market dominance.
In the US, Apple is being sued by the Justice Department and 16 attorneys general for antitrust violations. Europe is also investigating the company for possible breaches of the Digital Markets Act. These legal challenges have led to a more than 4% drop in Apple's shares, wiping out approximately $115 billion in market value and exacerbating its year-to-date losses to over 11%.
Apple has faced regulatory scrutiny before, accused of stifling competition. However, with its products becoming increasingly integral to daily life worldwide, authorities are taking a more aggressive stance.
The lawsuit accuses Apple of preventing competitors from accessing key hardware and software in its devices. European investigations will examine Apple's app store fees and conditions, raising concerns about market fairness.
Bill Kovacic, an antitrust professor, highlights the significant operational impact these legal challenges can pose, even if the company prevails in court. Apple, however, asserts the lawsuit misrepresents facts and law, defending its technology design philosophy and warning against government overreach.
The US lawsuit details Apple's efforts to suppress competition in areas like messaging apps and digital wallets. Despite this, Apple plans to introduce RCS messaging and has recently supported cloud-based gaming services.
