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Apple's market value decreases by $115 billion following a lawsuit in an iPhone antitrust case
Apple's stocks suffered a significant decrease, plunging by roughly $113 billion on Thursday, following an antitrust legal action initiated by the US DoJ against the tech powerhouse based in Cupertino. Simultaneously, Apple is under scrutiny for a new investigation in the EU due to the recently introduced Digital Markets Act.
Those invested in Apple, including stakeholders and investors, are worried about the potential impact on the company's financial stability and overall wellbeing due to the numerous legal challenges it is currently confronting.
Apple is confronted with a fresh legal challenge in the United States, with the Justice Department and 16 state attorneys general accusing them of breaching antitrust rules. Simultaneously, in Europe, it is reported that officials are scrutinizing Apple's compliance with the Digital Markets Act, increasing the regulatory burdens on the corporation.
Investors are expressing concern as authorities in the United States and Europe closely scrutinize Apple, with potential penalties on the horizon.
Apple's experience with regulatory oversight is not a new phenomenon. Over time, the corporation and its peers in the industry have been accused of engaging in monopolistic behaviors, making gains by suppressing competition. Nevertheless, as Apple's products have become more and more prevalent globally, regulators have become bolder in addressing worries about its dominance in the market.
The stock market reflected the consequences, as Apple's stocks took a 4.1% dive on Thursday. This drop erased around $113-$115 billion in market value, adding to an 11% loss for the year so far. Even though Apple was, until recently, the globe's most valuable company with a valuation surpassing $3 trillion, its 2024 performance has been trailing behind both the Nasdaq 100 and the S&P 500. At the time of writing this piece, Apple's market value was approximately $2.65 trillion.
The Department of Justice lodged an antitrust suit against Apple in a federal court in New Jersey on Thursday. The lawsuit claims that Apple is blocking competitors from accessing hardware and software functionalities on its widely used devices. In the same vein, possible probes in Europe will not only focus on Apple but also its rivals. These investigations will examine Apple's policies about charges, terms, and conditions for app store developers.
Following the legal action taken by the US Department of Justice, Apple criticized it, believing it was incorrect both factually and legally. The firm warned that such lawsuits could pave the way for greater governmental interference in tech design, and it vowed to strongly dispute the claims. Nonetheless, Apple chose not to comment on possible investigations in Europe.
The U.S. legal action claims that Apple has taken advantage of its power over app dissemination on the iPhone to stifle advancements that could make it easier for users to transition between phones. The allegations include Apple's unwillingness to back multi-platform messaging apps, limitations on digital wallets not owned by Apple, and non-Apple smartwatches, as well as the obstruction of mobile cloud streaming services.
Apple stood firm on its policies, underlining its dedication to creating innovative features that improve user experiences, all while putting privacy and security first. However, this legal battle threatens the brand's reputation and the core values it holds, which it claims distinguish its products in highly competitive industries.
The Digital Markets Act in Europe empowers the European Commission to enforce substantial fines, potentially as much as 10% of a firm's global yearly income, and twice that amount for recurrent violators. After conducting official probes into Apple and Google, the regulatory bodies intend to make definitive rulings within a year.
The recent penalty imposed on Apple by the European Union, amounting to 1.8 billion Euros or approximately $2 billion, for preventing music streaming apps from alerting users to more affordable options, emphasizes the increased examination following the enactment of the Digital Markets Act on March 7th.
(Incorporating information from various sources)
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