Shares in tech titan Apple (AAPL) were flattened today as it was fined around $115 million for abusing its app market position in Italy.
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Apple Abused Power
The country’s Competition and Market Authority handed Apple the fine for allegedly abusing its dominant position in the iOS app distribution market.
Following an investigation the competition regulator said that Apple holds an “absolute dominant position” through the App Store given that it is the only official channel that allows developers to reach iOS users. As such the tech giant had violated European competition rules by placing developers at a disadvantage.
The competition authority said that Apple had breached Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position by one or more companies in the internal market.
Created Unequal Conditions
According to the Italian watchdog, Apple has imposed stricter privacy rules on third-party developers than those applied to itself, creating unequal conditions.
Developers have had to obtain additional consent for data collection through mandatory requests from Apple, while Apple could use certain data for its own advertising without the same restriction, it added.
The Antitrust Authority said in a statement: “Third-party developers are required to obtain specific consent for the collection and linking of data for advertising purposes via a screen imposed by Apple, the so-called ATT prompt, which, however, is not sufficient to meet the requirements of privacy legislation, thus forcing developers to duplicate the request for consent for the same purpose.”
European Pressure Increases
Apple, like other U.S. tech firms, is increasingly under pressure in Europe.
Last week a group of 20 app developers and consumer groups wrote to the European Commission pleading for it to take action against Apple over its “exorbitant and unjustified fees.”
The Coalition for Apps Fairness states in the letter that it has “grave concerns regarding Apple’s persistent non-compliance with the Digital Markets Act in relation to its App Store.”
The European Union’s Digital Markets Act (DMA), implemented in 2023, mandates that large tech platforms designated as “gatekeepers,” such as Apple, facilitate in-app transactions outside their ecosystems at no charge.
Earlier this year, the European Commission fined Apple 500 million euros (about $588 million) for breaching the DMA by obstructing developers from guiding users to alternative payment methods.
It is another indication how big a risk legal and regulatory issues are for tech firms like Apple and its investors.
Is AAPL a Good Stock to Buy Now?
On TipRanks, AAPL has a Moderate Buy consensus based on 20 Buy, 10 Hold and 2 Sell ratings. Its highest price target is $350. AAPL stock’s consensus price target is $299.49, implying a 9.43% upside.
