Apple Faces Antitrust Scrutiny in China Amidst Tech Tariff Backdrop
Apple (AAPL) stock experienced a premarket decline of up to 2% on Wednesday following a Bloomberg report indicating that the Chinese government is considering an antitrust probe into the company's app store practices. Discussions with Apple executives and developers have reportedly been ongoing since last year, with the potential for a formal investigation if negotiations fail.
This news follows China's recent launch of an antitrust investigation into Google (GOOG). Both probes coincide with the U.S.'s announcement of additional 10% tariffs on Chinese imports, potentially impacting tech companies reliant on overseas manufacturing.
Although most iPhones are assembled in China through Foxconn, Apple has diversified its supply chain by producing devices in India and Vietnam. The company has also faced challenges in the Chinese market due to competition from Huawei. In the most recent quarter, Apple's revenue in China declined by 11% to $18.5 billion.
In addition to Chinese scrutiny, Apple faces antitrust concerns in the U.S. The Department of Justice filed a lawsuit last March, resulting in a 4% stock drop. The European Union also fined Apple $2 billion for alleged antitrust violations.
Despite industry hopes for reduced antitrust scrutiny under President Trump, recent actions suggest American companies may still face challenges in the merger and acquisition space.