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Apple's market value decreases by $115 billion following a lawsuit in an iPhone monopoly case
Apple's stock prices experienced a significant drop, declining around $113 billion on Thursday, after the US Department of Justice initiated a monopoly lawsuit against the tech powerhouse based in Cupertino. Concurrently, Apple is also facing a potential new probe in the EU due to the recent Digital Markets Act.
People who have invested in Apple and have a stake in the company are worried about the impact of the numerous legal battles on the company's financial stability and overall wellbeing.
In the United States, Apple is confronted with a fresh legal battle initiated by the Justice Department and attorneys general from sixteen states, accusing the firm of breaching antitrust legislations. Meanwhile, in Europe, it is believed that officials are scrutinizing Apple's compliance with the Digital Markets Act, thereby intensifying the regulatory strain on the corporation.
Investors are showing concern as regulatory authorities in the US and Europe scrutinize Apple meticulously, raising the possibility of hefty penalties.
Apple's brush with regulatory investigations is nothing new. Over time, the tech giant and its competitors have been accused of monopolistic behaviors, benefiting by suppressing rivalry. Nonetheless, as Apple's offerings have become progressively pervasive in everyday life globally, regulatory bodies have become more proactive in dealing with worries regarding its market dominance.
The impact was clear in the stock market, as Apple's stocks dropped by 4.1 per cent on Thursday. This decrease erased approximately $113-$115 billion in market value, leading to an annual loss of 11 per cent to date. Although Apple maintained its position as the world's most valuable company with a valuation surpassing $3 trillion until recently, its 2024 performance has fallen behind both the Nasdaq 100 and the S&P 500. On the day this article was written, Apple's market capitalization was approximately $2.65 trillion.
The Department of Justice has lodged an antitrust lawsuit in a New Jersey federal court against Apple on Thursday, alleging that the tech giant is hindering competitors from accessing hardware and software features on its widely used devices. In a similar vein, potential probes in Europe will examine not just Apple, but also some of its competitors, focusing on the company's policies about charges, terms, and conditions for app store developers.
Apple responded to the US Department of Justice's lawsuit by branding it as factually and legally incorrect. The tech giant warned that such legal measures might set a dangerous precedent, allowing government interference in tech design. They vowed to strongly fight against these claims. Despite this, Apple chose not to comment on possible investigations in Europe.
The US legal claim suggests that Apple has taken advantage of its authority over app dissemination on the iPhone, stifling advancements that could assist customers in transitioning between phones. The allegations against Apple include its lack of support for messaging apps that work across different platforms, limitations on third-party digital wallets and smartwatches not made by Apple, and the obstruction of mobile cloud streaming services.
Apple stood by its procedures, highlighting its dedication to innovative improvements that elevate user experiences, with a strong focus on privacy and security. However, the lawsuit could potentially harm the company's unique image and core beliefs, which it considers as the distinguishing factors of its products in the highly competitive industries.
The Digital Markets Act in Europe gives the European Commission the power to enforce substantial fines, which can be up to 10 percent of a business's overall global earnings for a year, and twice as much for repeated violators. After conducting official probes into Apple and Google, the regulatory bodies intend to make their final rulings within a year.
Apple's recent penalty of 1.8 billion Euros, roughly equivalent to $2 billion, in the European Union for hindering music streaming applications from notifying users of less expensive options highlights the increased examination since the Digital Markets Act was put into effect on March 7th.
(Incorporating information from various sources)
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