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Apple’s market cap plummets by $115 billion amid regulatory pressure

Regulators on both sides of the Atlantic are training their eyes on Apple, unnerving investors with fears over fines and threatening its market dominance.

In the US, the Justice Department and 16 attorneys general are suing the iPhone maker for violating antitrust laws. And in Europe, the company is said to be facing probes about whether it’s complying with the region’s Digital Markets Act.

Shares of the company slid more than 4% on Thursday, erasing about $115 billion in market value and taking their year-to-date loss back past 11%. Once the world’s most valuable firm at more than $3 trillion, Apple has underperformed both the Nasdaq and the S& in 2024.

It’s not the first time Apple is coming under regulatory scrutiny. The company and its peers have, for years, faced accusations of enriching themselves by suppressing competitors. But as Apple’s products have grown ever-more popular and established themselves as part of daily life around the world, authorities have also become more combative and wary of its power.

The American suit, filed on Thursday in the New Jersey federal court, accuses Apple of blocking rivals from accessing hardware and software features on its popular devices. The potential investigations in Europe, which also target some of Apple’s rivals, will focus on the firm’s new fees, terms and conditions for app store developers.

“There comes a point in which the downpour of cases and scrutiny that comes with them become a real drag on how these companies operate,” said Bill Kovacic, an antitrust professor at George Washington University Law School. “Even if they win, in an important way, they’ve lost.” Apple fired back at the US lawsuit by calling it “wrong on the facts and the law”. It warned that the action would “set a dangerous precedent, empowering govt to take a heavy hand in designing people’s technology”.

The company didn’t respond to a request for comment on the potential European probes. The US lawsuit alleges that Apple has used its power over app distribution on the iPhone to thwart innovations that would have made it easier for consumers to switch phones. DOJ highlights five examples of technologies in which it says Apple suppresses competition: super apps, cloud streaming game 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. Bloomberg

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