Fair And Square

What’s going on here?

Apple was sued on Thursday, by US regulators on a mission to rid the market of monopolies.

What does this mean?

Apple has a legion of loyal fans, primed to pledge their iPhone allegiance whenever a friend suggests the faux-pas of – gasp – trying another brand. The US Department of Justice (DoJ) has voiced its suspicions about the tactics Apple used to get there, though. Apple is being accused of gatekeeping its own services and icing out messaging apps that promote the mingling of iPhone users and anyone that dare prefer the touch of a competitor’s screen. If the DoJ proves that Apple is making the market tougher for rivals and consumers, the company could be forced to break up or shake up its business. That’s a tangible threat for Apple’s 64% market share – not what the stock needs after falling 7% this year while the S&P 500 climbed 10%.

Why should I care?

Zooming out: It’s getting toasty in here.

Apple’s derrière is used to the hot seat. European Union regulators slapped the company with a €1.8 billion ($1.95 billion) fine for policies that force music streaming companies to take payments through the App Store. On top of that, Apple’s being assessed against the rules of Europe’s Digital Markets Act, and a dicey outcome could add up to fines worth 10% of its annual revenue.

The bigger picture: Big losses, little wins.

That pile-up of legal threats isn’t going to appease Apple’s investors. They’ve been watching through clammy fingers while iPhone sales lag behind local rivals in China and electric vehicle plans were trashed. After all that, Apple has lost its spot in the Fab Five ranking, trailing behind Nvidia, Microsoft, Meta, Alphabet, and Amazon. The only silver lining for iPhone fans: any forced changes could mean more App Store freedom, a wider choice of browsers, and better support for third-party smartwatches and contactless payments.