Apple Inc. finds itself under the spotlight as Chinese regulators contemplate a probe into its App Store fees and policies, as reported by Bloomberg. The news, released on Wednesday, led to a 2.66% dip in Apple shares during premarket trading at 09:34 a.m. London time. The State Administration for Market Regulation (SAMR) is evaluating Apple's practice of taking up to a 30% cut on in-app spending and its restrictions on third-party payment services and app stores. This potential investigation poses a significant challenge for Apple in Greater China, where it has already seen an 11% decline in sales year-on-year for the December quarter.
If the probe proceeds, it could exacerbate ongoing difficulties for Apple in one of its most crucial markets. The tech giant is already facing fierce competition from local companies like Huawei, which are steadily eroding its smartphone market share. Meanwhile, neither Apple nor China's Ministry of Commerce has commented on the situation when approached by CNBC.
The SAMR has yet to decide on formally opening an investigation, but the potential scrutiny adds to Apple's global regulatory challenges. The Cupertino-based company recently adjusted its App Store operations in Europe, following the European Union's Digital Markets Act. This legislation necessitates allowing non-Apple entities to offer app stores and app developers to utilize third-party payment systems within the region.
Apple's situation comes amid heightened trade tensions between the United States and China, exacerbated by President Donald Trump's administration in its second term. In a similar vein, Chinese authorities have initiated an antitrust investigation into Google, although specific details of this probe remain undisclosed. Additionally, The Financial Times revealed that the SAMR may also consider investigating U.S. chipmaker Intel.
The international focus on Apple's App Store is not new, as regulators worldwide have scrutinized its policies. These developments underscore the increasing regulatory pressures faced by major U.S. tech companies operating in foreign markets, especially in China, where geopolitical dynamics are increasingly complex.