Shares of Apple plunged 4.1% on Thursday erasing nearly $113 billion in market value
Apple is being sued by the Justice Department and 16 attorney generals for violating antitrust laws. The legal threats that fall on Apple are upsetting investors with fears over fines and speculations over its market dominance. The company is also facing probes in Europe regarding the region’s Digital Markets Act.
Shares of the tech giant plunged 4.1% on Thursday erasing nearly $113 billion in market value. 2024 so far has been a tough year for Apple, a company that was valued at more than $3 trillion, has underachieved both the S&P 500 and Nasdaq 100. The tech giant had been facing regulatory scrutiny from time to time for augmenting itself by repressing its competitors. And it’s not just Apple, many tech giants have come under regulatory scrutiny in recent months.
Apple products’ popularity has grown over the years and established itself in the industry as the kingpin, becoming more competitive and guarded of its power. The lawsuit filed on Thursday in New Jersey accused the company of adding restrictions on cross-platform messaging and limitations on third-party digital wallets and non-apple smartwatches.
Bill Kovacic, an antitrust professor at George Washington University Law School stated “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.” “Even if they win, in an important way they’ve lost,” he added.
The firm had denied the allegations by calling it “wrong on the facts and the law.” The tech giant argues that its practices are essential to protect user privacy and security. Along with this Apple mentioned that government intrusion could “set a dangerous precedent”, challenging innovation and restricting technological progress.
Apple’s recent disagreements with European regulators point out the growing regulatory scrutiny faced by the company. In addition to the ongoing investigations into its app store practices, Apple recently encountered a €1.8 billion ($2 billion) fine from the EU for anti-competitive behavior related to music streaming apps. The company’s actions have raised concerns among European regulators about its market dominance and its impact on competition and consumer
The legal battles in both the United States and Europe signal a broader trend of scaling antitrust pressure on tech giants like Apple. As these companies continue to expand their influence and control over key markets, regulators are increasingly focused on ensuring fair competition and protecting consumer welfare. The outcomes of these legal proceedings could have far-reaching implications for the future of the tech industry and the balance of power between dominant platforms and their competitors.
As a response to the increasing regulatory scrutiny, the tech giant has emphasized its commitment to innovation and user experience. The company states that its products are designed to provide flawless integration, privacy protection, and a superior user experience. However, critics argue that Apple’s restrictive practices curb competition and limit consumer choice, ultimately harming innovation and driving up prices for consumers.
“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,” said the company in a statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
The European Commission can levy severe fines of up to 10% of a company’s total yearly worldwide revenue and up to 20% for companies that consistently break the law according to the Digital Markets Act, which lays down several dos and don’ts for some of the biggest internet platforms in the world. Within a year of beginning formal investigations into Alphabet Inc.’s Google and Apple, regulators hope to have made their final rulings.
