Apple Shares Slip Ahead Of Reported DOJ Antitrust Case
Updated Mar 21, 2024, 10:34am EDT
Topline
Apple shares have fallen roughly 2% since the opening bell Thursday, following overnight reports that the Justice Department is preparing to file a federal antitrust suit accusing the iPhone maker of blocking its rivals from accessing hardware and software features on its devices.
Key Facts
By 10:30 a.m. Thursday, the tech giant’s shares had dropped about 2% to just above $175, after previously falling in pre-market trading.
Bloomberg reported Wednesday the DOJ is expected to file its case against Apple in federal court Thursday.
The report doesn’t specify the issues the DOJ’s charges will focus on, but Apple has repeatedly come under criticism from the likes of Epic Games, Spotify, Tile and Paypal for locking some of its software and hardware features away from third-party apps.
The DOJ began probing Apple on this matter in 2019 but chose to prioritize its antitrust cases against Google as Epic filed a monopoly case against the iPhone maker.
News Peg
Hardware companies and app makers have accused Apple of using its market dominance to bully and unfairly disadvantage them by limiting several features to its own apps and services. Tile has repeatedly complained about Apple’s restrictions on how its smart trackers communicate with a user’s iPhone while allowing its own AirTag trackers to fully take advantage of the smartphone’s in-built features. Payment companies and banks have similarly complained that Apple restricts the use of its tap-to-pay NFC technology to Apple Pay while blocking other banking apps from doing the same. Others like Spotify have called out Apple for taking a 30% cut on all in-app purchases on its device while also offering competing services like Apple Music.
Key Background
The purported lawsuit comes as Apple is likely to face stringent antitrust scrutiny in Europe, with the implementation of the EU’s Digital Markets Act. Earlier this month, Apple was hit with a nearly $2 billion fine by the bloc as the European Commission found that the company abused its market dominance to harm music streaming providers. That case centered around the restrictions Apple places on app makers that prevented them from informing iPhone and iPad users about “alternative and cheaper music subscription services available outside of the app.” In the U.S., developers have harshly criticized Apple for its plans to charge a 27% fee on all in-app purchases made through external payment platforms. The company implemented this move after being forced by a court order to allow external payment providers on third-party apps. Epic Games CEO Tim Sweeney accused Apple of carrying out “bad faith ‘compliance’” of the court order and challenged the move in court. On Wednesday, Meta, Microsoft, X, Spotify and Match filed a legal petition backing Epic Games’ argument.
Big Number
Roughly 5.5%. That is how much Apple’s stock has fallen since the start of 2024, driven largely by investor concerns about Apple’s slow embrace of AI and its sputtering China business.
Further Reading
Justice Department to Sue Apple for Antitrust Violations as Soon as Thursday (Bloomberg)
Apple Stock’s Plunge Continues: Here’s Why It’s At A Crossroads (Forbes)
