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Apple's market value decreases by $115 billion following a lawsuit in an iPhone antitrust case
On Thursday, Apple’s stock prices experienced a huge drop, reducing their value by roughly $113 billion, following an antitrust legal battle initiated by the US Department of Justice against the tech powerhouse based in Cupertino. At the same time, Apple is potentially facing another probe in the European Union due to the introduction of the new Digital Markets Act.
The numerous legal battles that Apple is involved in have raised worries among its shareholders and investors about the potential impact on the company's financial stability and overall wellbeing.
Apple is confronting a fresh lawsuit in the United States, initiated by the Justice Department along with 16 state attorneys general. They claim that Apple has breached antitrust laws. Meanwhile, in Europe, it is said that officials are looking into whether Apple complies with the Digital Markets Act, increasing the regulatory scrutiny on the firm.
Investors are expressing concern over possible penalties as regulatory bodies in the US and Europe scrutinize Apple closely.
Apple isn't a stranger to regulatory oversight. Over time, allegations of monopoly tactics and making profits by squashing competition have been aimed at the company and similar businesses. Nonetheless, as Apple's products have become more commonplace globally, regulatory bodies have become more proactive in tackling issues related to its market dominance.
The fallout was clearly visible in the stock market, as Apple's stocks took a 4.1 per cent dive on Thursday. This drop eradicated around $113-$115 billion in market value, resulting in a total loss of 11 per cent for the year so far. Despite Apple's recent status as the world's most valuable company with a valuation over $3 trillion, its 2024 performance has been trailing behind both the Nasdaq 100 and the S&P 500. As of the day this piece was written, Apple's market capitalization was approximately $2.65 trillion.
The Department of Justice filed an antitrust lawsuit against Apple in a New Jersey federal court on Thursday. They claim that Apple is obstructing competitors' access to both hardware and software elements on its widely used devices. Concurrently, potential inquiries in Europe will not only focus on Apple, but also on some of its rivals. These investigations will examine the company's rules related to charges, agreements, and conditions for app store developers.
Reacting to the US DoJ's legal action, Apple criticized it as being inaccurate in its facts and legal basis. The tech giant warned that such lawsuits could set a dangerous precedent, allowing government interference in the design of technology, and confirmed their plan to strongly dispute the claims. Nonetheless, Apple chose not to remark on possible investigations in Europe.
The U.S. legal case claims that Apple has used its dominance over app distribution on the iPhone to stifle innovations that could make it easier for consumers to change phones. The accusations include Apple's unwillingness to back cross-platform messaging apps, limitations on third-party digital wallets and smartwatches not produced by Apple, as well as the prohibition of mobile cloud streaming services.
Apple stood up for its methods, highlighting its dedication to developing new ideas to improve user experiences, with a strong focus on privacy and security. However, the legal case could jeopardize the company's reputation and the values that it thinks distinguishes its products in an intensely competitive industry.
The Digital Markets Act in Europe gives the European Commission the power to levy substantial fines, which could be as much as 10 percent of a company's total global income annually, and twice that for companies that violate the rules repeatedly. After conducting official inquiries into Apple and Google, the regulatory authorities plan to make their final judgments within a year.
The recent fine of approximately $2 billion or 1.8 billion Euros imposed on Apple by the European Union for preventing music streaming applications from notifying users about more affordable options highlights the increased examination since the Digital Markets Act was introduced on March 7th.
(Incorporating information from various sources)
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