Regulators on both sides of the Atlantic are taking aim at Apple.
The US Department of Justice and 16 state attorneys general are suing the iPhone maker for violating antitrust laws. In Europe, the company is rumoured to be facing an investigation into whether the region is complying with the Digital Markets Act.
The company’s shares fell 4.1% on Thursday, wiping around $113 billion off its market value and taking its year-to-date loss to 11%. Apple, once the world’s most valuable company at more than $3 trillion, has underperformed both the Nasdaq 100 and the S&P 500.
This is not the first time Apple has come under legal scrutiny. For years, the company and its peers have been accused of enriching themselves by stifling competition.
The lawsuit, filed on Thursday in federal court in New Jersey, accuses Apple of blocking competitors’ access to hardware and software features in its popular devices. Potential investigations in Europe, which also target some of Apple’s rivals, will focus on the company’s new fees, terms and conditions for App Store developers.
Apple responded to the US lawsuit by calling it ‘factually and legally incorrect’. It warned that the case would ‘set a dangerous precedent and give the government a heavy hand in shaping people’s technology’ and vowed to fight it. The company did not respond to a request for comment on possible investigations in Europe.
Accusation of ‘suppressing competition’
The lawsuit, filed in the US, alleges that Apple has used its power over the distribution of apps on the iPhone to block innovations that would make it easier for consumers to switch phones. According to the Department of Justice, the company has refused to support cross-platform messaging apps, limited third-party digital wallets and non-Apple smartwatches, and blocked mobile cloud streaming services.
The department highlights five examples of technologies it says Apple has stifled competition: super apps, cloud-based gaming apps, messaging apps, smartwatches and digital wallets. The company recently added support for cloud-based gaming services and said it would add RCS cross-platform messaging later this year.
“At Apple, we innovate every day to build technology people love, design products that work together seamlessly, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that differentiate Apple products in highly competitive markets,” the company said in a statement.
Apple was recently fined €1.8 billion
The Digital Markets Act (DMA), which sets out a series of do’s and don’ts for some of the world’s biggest technology platforms, allows the European Commission to impose hefty fines of up to 10 per cent of a company’s total annual global turnover, and up to 20 per cent for companies that repeatedly break the rules.
The regulators, who have opened official investigations into both Google and Apple, aim to make their final decisions within 12 months.
Apple, which just escaped a €1.8 billion fine from the European Union for preventing music apps from alerting users to cheaper deals, has been under intense scrutiny since the DMA came into full force on 7 March.
