Apple loses $113 billion in market value due to regulatory close

Post by: Dr. Amrinder Pal Singh

In the United States, the Justice Department and 16 state attorneys general have initiated legal action against Apple Inc. for alleged violations of antitrust laws. Simultaneously, regulatory agencies on both sides of the Atlantic are closely monitoring the tech giant's activities, causing anxiety among investors and raising concerns about potential fines and the company's market dominance.

In the US, the lawsuit filed in a New Jersey federal court accuses Apple of restricting competitors' access to hardware and software features on its popular devices. Meanwhile, in Europe, authorities are reportedly investigating whether Apple is complying with the region's Digital Markets Act, focusing on the company's app store fees, terms, and conditions for developers.

Following the news, Apple's shares plummeted by 4.1% on Thursday, wiping out approximately $113 billion in market value and bringing its year-to-date loss to 11%. Once the world's most valuable company with a market capitalization exceeding $3 trillion, Apple's stock performance in 2024 has lagged behind both the Nasdaq 100 and the S&P 500.

This is not the first time Apple has faced regulatory scrutiny. Over the years, the company and its peers have faced accusations of anti-competitive behavior. However, as Apple's products have become increasingly popular worldwide, authorities have become more assertive in addressing concerns about its market power.

The US lawsuit alleges that Apple has used its control over app distribution on iPhones to stifle innovations that could facilitate consumers' ability to switch phones. The company has been accused of limiting support for cross-platform messaging apps, third-party digital wallets, non-Apple smartwatches, and mobile cloud streaming services.

Apple has vehemently denied the allegations, stating that the lawsuit is "wrong on the facts and the law" and warning of the precedent it could set. The company has vowed to vigorously defend itself against the legal action.

Meanwhile, in Europe, Apple faces potential penalties under the Digital Markets Act, which empowers the European Commission to levy fines of up to 10% of a company's global annual revenue. Regulators aim to conclude their investigations into Apple's conduct within 12 months.

The scrutiny intensified following the European Union's imposition of a €1.8 billion ($2 billion) fine on Apple for impeding music streaming apps from informing users about cheaper subscription options. With the Digital Markets Act now in full effect, Apple remains under close observation by regulators on both sides of the Atlantic.

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