Apple Faces Antitrust Probe in China Amidst US-China Trade Tensions
Company Stock Dips After Report of Ongoing Discussions with Chinese Regulators
(New York, NY) - Apple Inc. (AAPL) shares declined premarket following news of a potential antitrust investigation by the Chinese government. Bloomberg reported that discussions have been underway between Chinese officials, Apple executives, and developers since last year regarding the company's app store policies and fees.
Sources cited by Bloomberg indicated that the investigation may not proceed formally if talks yield positive results. However, the news comes on the heels of China's antitrust investigation into Google (GOOG) and amid heightened US-China trade tensions.
Recent US tariffs on Chinese imports have raised concerns for tech companies with overseas manufacturing operations. Most iPhones are assembled in China by Foxconn, although Apple has expanded production to India and Vietnam.
Apple faces challenges in the Chinese market due to competition from Huawei. The company's revenue from China declined 11% in the recent quarter, attributed partly to lower inventory levels. CEO Tim Cook expressed optimism for recovery once China authorizes the rollout of Apple Intelligence.
Apple is in discussions with ByteDance and Tencent about integrating AI features into iPhones sold in China.
Meanwhile, Apple faces antitrust scrutiny in other jurisdictions. The US Department of Justice filed a lawsuit last year, causing a 4% drop in shares. The EU also fined the company $2 billion for alleged anti-competitive practices.
Despite hopes for reduced antitrust scrutiny under President Trump, recent actions suggest American companies may still face challenges in mergers and acquisitions.