Apple's Stock Drops Amid Reports of Potential Investigation by Chinese Regulators into App Store Practices
Apple faces new challenges as stock prices fall amid reports of a potential investigation into its App Store practices by Chinese regulators.
Bad news for Apple, as the company's stock drops following reports from Bloomberg that Chinese regulators are considering opening a formal investigation into the fees and policies of the App Store. The State Administration for Market Regulation (SAMR) is looking into various practices, including Apple's commission of up to 30% on in-app spending and the blocking of third-party payment services and app stores. As per Bloomberg's sources, a decision on whether a formal investigation will proceed has yet to be made.
Apple's shares fell by 2.23% in pre-market trading on Wall Street, despite the stock having surged by 24% over the past 12 months, which allowed the company to reclaim its position as the world's most valuable by market capitalization, now sitting at $3.5 trillion.
This news comes amid heightened trade tensions between the U.S. and China, following President Donald Trump's announcement of new tariffs on Chinese goods, to which China responded almost immediately with its own retaliatory tariffs.
Apple has consistently maintained that its App Store policies are designed to protect users and enhance the experience across all its products. However, the App Store has been under scrutiny from regulators worldwide. The company was previously compelled to open the App Store in Europe, allowing third-party companies to offer app stores, with developers also permitted to use alternative payment systems.
If the investigation in China proceeds, it could present more challenges for Apple in one of its largest markets, where it already faces stiff competition from local players like Huawei.