Apple Inc. (AAPL) saw its stock dip as much as 2% in premarket trading following a report indicating that Chinese regulators are considering launching an antitrust investigation into the company’s app store policies and fees.
According to sources cited in the report, Chinese officials have been engaging in discussions with Apple executives and developers since last year. A formal investigation may be avoided if these negotiations yield satisfactory results. Despite the initial market reaction, Apple shares recovered and closed the trading session flat.
This development follows news from Tuesday that China’s antitrust authority has initiated a separate investigation into Google (GOOG, GOOGL). The regulatory moves come on the heels of the U.S. government’s decision to impose an additional 10% tariff on Chinese imports, a measure that could impact American tech firms relying on overseas manufacturing.
Apple, which assembles most of its iPhones in China through its partnership with Foxconn, has been working to reduce reliance on Chinese manufacturing by expanding production into India and Vietnam.
The company is already facing challenges in China, where domestic smartphone giant Huawei has gained significant market share. In the most recent quarter, Apple’s revenue from China declined 11% to $18.5 billion. CEO Tim Cook attributed nearly half of that drop to lower inventory levels. He also suggested that sales could rebound once Apple Intelligence, the company’s AI-powered feature suite, gains approval for rollout in China. Reports indicate Apple is in discussions with ByteDance and Tencent (TCEHY) to integrate its AI capabilities into iPhone models sold in the Chinese market.
Apple’s regulatory troubles extend beyond China. In March, the U.S. Department of Justice filed a sweeping antitrust lawsuit against the company, causing Apple shares to fall 4% on the day of the announcement. Additionally, last year, the European Union fined Apple $2 billion for alleged competition law violations.
Tech industry advocates had anticipated a more lenient approach to antitrust enforcement under former President Donald Trump. However, recent actions from his new administration suggest that major corporate mergers and acquisitions may still face significant regulatory scrutiny, keeping Apple and other tech giants under the watchful eye of global regulators.
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