Apple in a dive; the bitten apple loses billions of dollars due to US lawsuit

Regulators in the United States and Europe have put Apple under scrutiny, unnerving investors with fears about fines and threatening its market dominance.

The Department of Justice and 16 US attorneys general sued the iPhone maker for violate antitrust laws. And in Europe, the company is said to face investigations into whether it complies with Digital Markets Law region of.

The company’s shares fell 4.1 percent, this Thursday, March 22, erasing around 113 billion dollars in market value and bringing its year-to-date loss to 11 percent. Apple, once the most valuable company in the world at more than $3 trillion, has underperformed both the Nasdaq 100 and the S&P 500 so far this year.

It is not the first time that Apple has been under regulatory investigations. The company and its peers have faced for years accusations of enriching oneself by suppressing competitors. But as Apple products have become increasingly popular and established as part of daily life around the world, authorities have also become more combative and cautious about their power.

The US lawsuit, which was filed in federal court in New Jersey, accuses Apple of preventing rivals from accessing hardware and software features of its popular devices. The possible investigations in Europe, which also target some of Apple’s rivals, will focus on the new rates, terms and conditions of the company for app store developers.

“There comes a point where the flood of cases and the scrutiny that comes with them becomes a real drag on the way these companies operate,” said Bill Kovacic, an antitrust professor at George Washington University Law School. . “Even if they win, in an important sense they have lost.”

Apple responded to the US lawsuit by calling it “factually and legally wrong.” He warned that the action would “set a dangerous precedent, empowering the government to take a heavy hand in the design of popular technology” and promised to “defend vigorously against it.”

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. According to the Department of Justice, the company has refused to support cross-platform messaging apps, limited third-party digital wallets and non-Apple smartwatches, and has blocked mobile cloud streaming services.

He highlighted five examples of technologies where he claims Apple suppresses competition: super apps, cloud gaming apps, messaging apps, smart watches 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 people love technology: we design 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 sets out do’s and don’ts for some of the world’s largest tech platforms, allows the European Commission to impose heavy sanctions of up to 10 percent of a company’s total annual global revenue. company, and up to 20 percent for companies that repeatedly break the rules. After launching formal investigations into Apple, as well as Alphabet’s Google, regulators aim to make their final decisions within a year.

Apple, which was just fined €1.8 billion by the European Union for preventing music streaming apps from informing users about cheaper deals, has been under intense scrutiny since the DMA went into full effect. March 7th.