The US Justice Department and 16 attorneys general are suing Apple for antitrust violations. European authorities are investigating whether the corporation is compliant with the Digital Markets Act.
The company's shares fell 4.1% Thursday, wiping off $113 billion in market value and extending its year-to-date loss to 11%. Apple, once worth over $3 trillion, lagged the Nasdaq 100 and S&P 500 in 2024.
Apple has faced regulatory scrutiny before. The firm and its peers have been accused of benefiting themselves by repressing competition for years. However, as Apple's goods have gotten more popular and integrated into daily life worldwide, authorities have become more hostile and cautious of its dominance.
Apple is accused of restricting rivals from accessing hardware and software components on its popular gadgets in a New Jersey federal court suit filed Thursday. Apple's new app store developer fees, terms, and conditions will be investigated in Europe, along with several of its competitors.
"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 George Washington University Law School antitrust expert Bill Kovacic. "Even if they win, in an important way they've lost."
Apple called the US case "wrong on the facts and the law." It cautioned that the measure would "set a dangerous precedent, empowering government to take a heavy hand in designing people's technology" and resolved to "vigorously defend against it." The corporation declined to comment on European probes.
The US complaint claims that Apple has used its iPhone app distribution power to block advancements that would have made switching phones easier. The DOJ claims Apple blocks mobile cloud streaming services, third-party digital wallets, and non-Apple smartwatches, as well as cross-platform messaging apps.
It lists super apps, cloud streaming game applications, messaging apps, smartwatches, and digital wallets as Apple-suppressed technology. It just added cloud-based gaming capabilities and will add RCS cross-platform communications 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 firm stated in a release. "This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets."
The Digital Markets Act, which governs some of the world's top electronic platforms, authorizes the European Commission to fine companies up to 10% of their global revenue and 20% for repeated violations. After launching formal investigations into Apple and Alphabet Inc.'s Google, regulators intend to make final determinations within a year.
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