Apple Shares Fall by 3% as China Considers Antitrust Investigation on App Store
Apple stocks dipped by 3% on February 5, CNBC has reported. The Apple shares fall came after Bloomberg reports showed that Chinese regulators are planning to probe App Store fees and policies. Officials of the Chinese government have been engaging Apple developers and executives since last year. Regulators in China could probe Apple if these talks fail.
Apple App Store investigation
It’s still unclear whether the regulator will launch a formal probe into Apple. However, reports indicate that China’s probe into Apple App Store fees would focus on policies that the tech giant uses to take up to 30% share of in-app spending.
Chinese competition watchdog, State Administration for Market Regulation (SAMR) will also be investigating Apple for allegations of blocking third-party payment services and app stores. Reports of China’s antitrust probe on Apple came just a day after SAMR commenced an antitrust probe into Google.
The two investigations coe shortly after the US introduced an extra 10% tariff on goods imported from China. The new tariffs will have a significant impact on US tech giants whose consumer products are assembled in China. The Asian country is reportedly considering launching a probe into another US tech company, Intel.
Reliance of China
Apple’s iPhones are assembled by its manufacturing partner, Foxconn in China. However, the tech giant has diversified its supply chain in recent years. Besides China, the company now produces iPhones in Vietnam and India. Last quarter, Apple’s sales revenue in the Chinese market dipped by 11%.
The iPhone manufacturer has been facing fierce competition from domestic smartphone manufacturers like Huawei and Vivo that have taken the Chinese market by storm. In recent months, Apple’s App Store has come under serious scrutiny by regulators globally. The company was forced to open up its App Store in Europe after the EU Digital Markets Act took effect.
This move gave non-Apple firms access to the platform, allowing them to offer app stores across the EU. App developers in the region are able to use third-party payment systems as well. Should China push through with its probe, it will spell more trouble for Apple in one of its largest markets.
Widespread Troubles
Apple is facing antitrust scrutiny in the US and UK. Last month, a UK antitrust watchdog commenced investigation into the big mobile ecosystems owned by US big techs, Google and Apple. The focus of Apple-Google antitrust probes is to establish whether the companies have violated the country’s stringent digital competition regulations.
Early last year, the Department of Justice in the US filed an antitrust lawsuit against the iPhone maker causing its shares to drop by 4% the same day. Apple stock declined further in 2024 after the EU slapped the company with a $2 billion fine for violating competition laws abroad.
US tech industry advocates expected a slow down in US antitrust scrutiny under President Donald Trump. However, recent actions by the new administration suggest that US big techs may not get a free pass on matters pertaining to big acquisitions and mergers.
