Apple Faces Antitrust Probe Into App Store Dominance - Report

Politico reports that U.S. authorities may follow EU competition regulators in probing the tech giant's App Store dominance.

Apple Inc.  (AAPL) - Get Report shares drifted lower Wednesday amid reports that U.S. antitrust authorities are preparing a probe into the tech giant's App Store.

Politico reported that states attorneys general, as well as the U.S. Department of Justice, could launch an investigation into the App Store's market dominance. Last week, House Democrat David Cicilline, who chairs a Congressional subcommittee on Antitrust issues, called Apple's App store demands on developers -- which must pay a fee to sell products on the company's platform --  'highway robbery' during an interview on Bloomberg television and called on CEO Tim Cook, as well as other big tech bosses, to testify before U.S. lawmakers.

Apple shares were marked 0.3% lower Wednesday at $365.26 each, after hitting an all time closing high of $366.53 yesterday in a move that extended the stock's year-to-date gain to around $24.8% and valued the Cupertino, California-based group at just under $1.6 trillion.

EU regulators have also opened an antitrust investigation into both the company's App Store and Apple Pay units, with a focus on Apple's demand that developers use its in-App purchasing system to sell their products to customers. 

Developers are also balking at the company's demand to hand over nearly a third of any App's annual revenues.

"Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads, said Executive Vice-President Margrethe Vestager, who heads the bloc's competition policy. "It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices."

"We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books," she added. "I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”