- Apple faces scrutiny from the European Union for potentially violating the Digital Markets Act.
- Despite legal and regulatory challenges, Apple's financial performance remains robust, regaining its position as the world's second-largest by market capitalization.
Apple Inc (NASDAQ:AAPL) is under scrutiny by the European Union this week, accused of violating the Digital Markets Act (DMA). The focus of the allegations is on Apple's App Store policies, which the EU claims restrict competition.
If Apple doesn't comply with DMA guidelines, it could face a fine of up to 10% of its global revenue. The formal accusations this week require Apple to respond to the EU's preliminary findings. To avoid hefty penalties, Apple can propose changes that meet regulatory requirements.
The company's main defense is the security benefits of its App Store, arguing that its controlled environment offers enhanced protection for users. The EU has shown a willingness to discuss this point further.
The 30% commission Apple charges on transactions through its App Store has been a major issue. In response to pressure and scrutiny, Apple has made several adjustments, such as waiving fees for non-revenue-generating apps and simplifying the process for developers to set up alternative app stores.
Meanwhile, the EU has started another investigation into Apple's new terms for app developers, examining the fees and other barriers to using these alternative platforms.
Amid these legal challenges, Apple's financial performance remains strong. The company recently regained its position as the world's second-largest by market capitalization, a spot it briefly lost to NVIDIA Corp (NASDAQ:NVDA).
Nvidia's 15% stock drop allowed Apple to reclaim this position, though Nvidia is showing signs of recovery, indicating ongoing competition for market dominance.
Financially, Apple has demonstrated impressive resilience and growth. he stock is up 10% this year, thanks to a strong rally in June that pushed shares past the December 2023 all-time high of $199 and broke the $200 psychological barrier. This indicates that the stock may continue to trend upward.
Despite a 17% drop earlier this year, the stock found support at $164 in April and has since surged nearly 30%. Looking forward, the next significant resistance could be around $300, another psychological threshold that might affect its continued uptrend.
After the closing bell on Wednesday, June 26, the stock closed at $213.25, trading up by 2.00%.
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.