Apple’s stock dropped more than 4 percent in trading on Wall Street overnight after the US Department of Justice (DOJ) and 15 other states filed a lawsuit against the company. Meanwhile, Apple is facing a new investigation in the EU due to the proposed Digital Markets Act.
Apple’s shareholders and investors worry about how the series of lawsuits against the tech company will impact its financial status and overall well-being. Dual investigations on both sides of the Atlantic are unnerving investors resulting in a market value loss of $113 billion on Thursday – their worst day since August, 2023.
The tech giant’s losses have reached 11% this year, contrasting with the record highs seen in the rest of the US market. Today, shares opened at around the same price they closed at on Thursday, which was $172, but then started to decrease again. Once hailed as the world’s most valuable company with a market value topping $3 trillion, Apple’s performance in 2024 hasn’t been great. It’s fallen short on both the Nasdaq 100 and the S&P 500.
The US Department of Justice (DOJ) and 15 states filed a lawsuit against the tech giant on Thursday. They claim that Apple has monopolized the smartphone market, harmed smaller competitors, and raised prices for consumers.
US Attorney General Merrick Garland stated, “Consumers should not have to pay higher prices because companies violate antitrust laws. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
The claims in the US lawsuit suggest that Apple stopped rivals from using certain hardware and software features on its devices. Meanwhile, there could be inquiries in Europe about the new fees and rules Apple has set for app developers on its platform.
Apple, however, has declined the allegations in response to the lawsuit the US Government has filed against them and has stated that the lawsuit is “wrong on the facts and the law”.
The company cautioned that these actions might create a risky example, giving the government too much control over how technology is designed.
“At Apple, we innovate everyday 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. This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” said Apple.
The company also vowed to “vigorously defend against it” but did not comment on potential probes in Europe.
Apple has dealt with regulatory scrutiny before. For a while now, the company, along with others in the industry, has faced accusations of acting like a monopoly, making money by limiting competition. But as Apple’s products have become more common in people’s lives all around the world, regulators have become more determined to deal with worries about its control over the market.
Apple recently got fined 1.8 billion Euros, which is around $2 billion, in the European Union. They were fined for stopping music streaming apps from telling users about cheaper options. This shows how closely they’re being watched since the Digital Markets Act started on March 7th.
In Europe, the Digital Markets Act grants the European Commission power to impose big fines, up to 10 percent of a company’s yearly global income, and even more for companies that do it again. After looking closely at Apple and Google, regulators hope to make their final decisions within a year.