Apple Inc. has suffered a significant blow to its market capitalization after a lawsuit was filed against the tech giant for alleged monopolistic practices in the smartphone market.
Shares of Apple plummeted by over 4% in overnight trading on Wall Street, resulting in a staggering loss of $113 billion in market value.
The lawsuit, filed by the US Department of Justice (DOJ) and 15 states, accuses Apple of monopolizing the smartphone market, disadvantaging smaller competitors, and driving up prices for consumers.
This sharp decline in Apple’s shares has exacerbated its year-to-date losses to 11%. Despite once being hailed as the world’s most valuable company with a market value surpassing $3 trillion, Apple’s performance in 2024 has been lackluster, trailing behind both the Nasdaq 100 and the S&P 500.
The legal action against Apple is part of a broader trend of regulatory scrutiny faced by tech giants like Alphabet’s Google, Meta Platforms, and Amazon.com for alleged violations of antitrust laws.
US Attorney General Merrick Garland underscored the importance of challenging such practices, stating, “Consumers should not have to pay higher prices because companies violate antitrust laws. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
The lawsuit alleges that Apple has hindered competitors’ access to hardware and software features on its devices, further entrenching its dominant position in the market.
Furthermore, potential investigations in Europe are anticipated to scrutinize Apple’s recent changes in fees, terms, and conditions for app developers operating on its platform.
In response to the lawsuit, Apple has vehemently denied the allegations, asserting that the legal action is “wrong on the facts and the law.”
The company cautioned that such legal actions could establish a perilous precedent, granting the government undue authority over technology design.
“At Apple, we innovate every day to create technology that people love; our products are designed to work seamlessly, prioritize privacy and security, and deliver a magical user experience. This lawsuit threatens our core values and the principles that distinguish Apple products in fiercely competitive markets,” declared Apple.
