Apple (AAPL) is once again under fire in Europe, this time from two civil rights organizations, Article 19 and Germany’s Society for Civil Rights, Reuters reported. Both groups have filed a formal antitrust complaint with the European Commission, accusing the tech giant of violating the Digital Markets Act (DMA) by making its App Store and device terms restrictive.
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It must be mentioned that the DMA aims to limit the power of Big Tech firms and open up digital markets to smaller rivals and consumers.
The complaint alleged that Apple limits competition and consumer choice by making it difficult for users and developers to use or switch to third-party apps and services. Also, the groups argued that these practices lock users into AAPL’s ecosystem, making it tough for smaller developers to compete.
Moreover, the complaint focuses on Apple’s rules for iOS and iPadOS, which the groups claim block interoperability and the use of alternative app stores. They argued this hurts competition and goes against the EU’s DMA.
AAPL Attacks EU’s DMA in Court
This is another legal setback for Apple, which was fined €500 million ($583 million) in April for breaching the same EU law. In response, the iPhone maker appealed the decision in June and has since been working to resolve the dispute with regulators.
During recent court hearings, Apple’s lawyer Daniel Beard argued that the DMA places “hugely onerous and intrusive burdens” on the company and conflicts with its rights in the marketplace, according to Bloomberg.
Further, Apple challenged the law in three areas: compromised security, worse user experience, and the EU’s move to investigate whether iMessage should also follow the same rules.
Apple’s Rising Regulatory Pressure
Apple is facing growing pressure from global regulators over its App Store rules, which critics say give it too much control over pricing, distribution, and user access.
With the DMA now in full effect, more complaints from developers, consumer groups, and civil society organizations are expected.
Importantly, if the Commission finds merit in the latest complaint, Apple could face further fines or be forced to make changes to how it operates its App Store and software ecosystem in Europe.
According to the TipRanks Risk Factors tool, one of AAPL’s main risk categories is Legal and Regulatory, which accounts for 21.4% of the total 28 risks identified. Moreover, the legal risk exposure is higher than the industry average of 16.5%.
Is Apple a Buy, Sell, or Hold?
Turning to Wall Street, Apple stock has a Moderate Buy consensus rating based on 20 Buys, 12 Holds, and three Sells assigned in the last three months. At $260.40, the average AAPL stock price target implies an upside potential of 0.45%.
