Apple Inc. shares slid today after it was reported China’s watchdog will mount an antitrust investigation into the company’s App Store commissions.
The probe, similar to those already carried out in the U.K. and EU, will examine Apple’s practice of taking 30% of in-app purchase fees and blocking external payment services. Apple ran into a similar kind of trouble in the U.S. when Epic Games Inc. brought an antitrust case against the company, while Apple has also met resistance in the shape of probes or lawsuits in Australia, India, Korea, and Japan.
Now it’s reported that China’s State Administration for Market Regulation, SAMR, is considering going after Apple for its App Store fees and policies. There hasn’t been a formal announcement yet. but it was still enough to see Apple’s shares drop 3%.
The news comes as a trade war between China and the U.S. heats up just a month into President Donald Trump’s term. As the two nations butt heads in a tariff stand-off in what’s looking like a war of escalation, Apple might have been caught in the crossfire. Just minutes after new U.S. tariffs on Chinese goods took effect, China announced probes into various U.S. companies, including Google LLC, which will be investigated regarding China’s antimonopoly law. According to the Financial Times, U.S. chipmaker Intel Inc. will also come under scrutiny.
According to people familiar with the Apple probe who spoke to Bloomberg under the condition of anonymity, there have been past disputes over Apple’s App Store policies between Apple and the Chinese app developer giants Tencent Holdings Ltd. and ByteDance Ltd. If investigators find these policies stifle competition and hurt consumers, Apple might find itself having to make some very costly changes in one of its biggest markets.
It’s unclear right now how things will transpire. Apple and China have a cozy relationship, with the company manufacturing many of its products over there. Then again, iPhone sales are drastically down in China, so it’s possible Apple could leverage the probe to make some positive changes to the App Store – opening an App Store in China as happened in the EU.
Photo: Unsplash
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