Apple’s (AAPL) recent changes to its App Store rules and fees are expected to satisfy European Union antitrust regulators, according to Reuters, which cited people familiar with the situation. Indeed, last month, Apple introduced new 20% fees on purchases made through the App Store for developers using its platform. Additionally, these fees can be as low as 13% for small businesses that are enrolled in a special program. As a result, this move could help the tech company avoid paying steep daily fines.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
It is also worth noting that Apple will charge developers between 5% and 15% if they direct users to make payments outside of the App Store. Developers will now also be allowed to include an unlimited number of links to external payment options. Interestingly, these updates followed the EU’s fine of 500 million euros (approximately $587 million) in April, which argued that Apple’s past restrictions had made it too difficult for developers to guide users toward more affordable alternatives, thereby violating the Digital Markets Act.
Nevertheless, the European Commission is expected to approve Apple’s proposed changes soon. In the meantime, the Commission stated that it is still reviewing Apple’s submission and keeping all options open. Apple, which hasn’t commented further, previously said that the changes were made in order to avoid daily penalties. In fact, if it didn’t comply, Apple could have faced fines of up to 5% of its average daily global revenue, or around 50 million euros per day.
Is Apple a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 13 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $227.37 per share implies 6.1% upside potential.
