Apple Loses $113 Billion In Market Value As US, European Regulators Launch AntiTrust Law Suit

The repercussions of these legal challenges were immediately felt in the financial markets, with Apple's shares plummeting by 4.1 per cent on Thursday, wiping out about $113 billion in market value

With a market capitalisation exceeding $3 trillion, Apple's performance in 2024 has lagged behind both the Nasdaq 100 and the S&P 500 indices.

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Regulatory bodies on both sides of the Atlantic have turned their attention to Apple Inc., sparking concerns among investors and raising the spectre of hefty fines that could undermine the company's dominant position in the market, according to Bloomberg. In the US, the Justice Department, along with 16 state attorneys general, has filed a lawsuit against the tech giant, accusing it of violating antitrust laws, while in Europe, Apple finds itself under investigation for potential breaches of the Digital Markets Act, which governs the behaviour of major tech platforms in the region.

The repercussions of these legal challenges were immediately felt in the financial markets, with Apple's shares plummeting by 4.1 per cent on Thursday, wiping out about $113 billion in market value. This downturn has exacerbated the company's year-to-date losses, bringing them to a troubling 11 per cent. Once the world's most valuable firm, with a market capitalisation exceeding $3 trillion, Apple's performance in 2024 has lagged behind both the Nasdaq 100 and the S&P 500 indices.

While Apple has faced regulatory scrutiny in the past, the current wave of investigations reflects growing concerns among authorities regarding the company's market power and conduct. Accusations of anti-competitive practices have dogged Apple and its peers for years, fueled by allegations of stifling competition to enrich themselves.

The lawsuit filed in the US alleges that Apple has leveraged its control over app distribution on the iPhone to stifle innovation and limit consumer choice. Among the specific allegations are claims that Apple has obstructed the development of cross-platform messaging apps, restricted third-party digital wallets and non-Apple smartwatches, and impeded mobile cloud streaming services.

In response to the US lawsuit, Apple has vehemently denied any wrongdoing, asserting that the allegations are "wrong on the facts and the law." The company has warned against the precedent that such legal actions could set, cautioning against excessive government intervention in technology design.

Meanwhile, in Europe, regulators are scrutinising Apple's compliance with the Digital Markets Act, which could result in significant penalties. The Act empowers the European Commission to impose fines of up to 10 per cent of a company's total annual worldwide revenue, with even higher penalties for repeat offenders. Following formal investigations into Apple and other tech giants like Alphabet Inc.'s Google, regulators aim to reach final decisions within 12 months.

Apple's troubles in Europe have been further compounded by a recent €1.8 billion ($2 billion) fine imposed by the European Union for impeding competition in the music streaming market. Since the full implementation of the Digital Markets Act, Apple has found itself under intense scrutiny, facing the prospect of significant penalties and regulatory constraints.

As the regulatory spotlight intensifies on both sides of the Atlantic, Apple faces an uncertain future, with its market dominance hanging in the balance amidst mounting legal challenges and regulatory pressures.