The U.S. Department of Justice will sue Apple Inc. (NASDAQ: AAPL) for anti-competitive practices. The suit will say that Apple has blocked several competitors from using its hardware and software to promote their productions. And it will have an impact on Apple stock.
According to Bloomberg, “The coming case will mark the third time that the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first case accusing the iPhone maker of illegally maintaining its dominant position.” The European Union also just fined Apple approximately $3 billion for anti-competitive behavior against companies that are rivals to its streaming business.
Government action is not Apple’s only problem. Meta, Microsoft, X, and Match Group have taken the iPhone maker to court because it has not honored a deal to open Apple’s app store to their products. According to CNN, “The filing accuses Apple of willfully circumventing the spirit of the original order, which was designed to unlock competition by forcing Apple to let app makers communicate with their users about deals and promotions in specific ways.”
Add these headwinds to what appear to be slow iPhone sales in China and worries that the company lags competition in delivering AI to customers, and Apple stock may be under pressure for months, if not longer. (Here are five reasons to avoid Apple products today.)
The company’s turnaround options have narrowed quickly. Apple stock reflects that, as it is down 7% this year, while the S&P 500 is 10% higher. The only possibility of a Wall Street change in sentiment is probably a successful launch of the iPhone 16, and that does not happen until September.
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