Apple fights another antitrust ruling in Europe as conditions at home worsen

(Originally published June 3 in “What in the World“) Apple is fighting a European antitrust ruling that could cost it penalties equivalent to 10% of annual sales.

Customers have long complained that buying one Apple device condemned them to having to buy a flotilla of compatible Apple devices and services. The European Union’s Digital Markets Act, which went into force in 2022, sought to prevent such monopolistic behavior and enable smaller start-ups to more easily crack the market with their own innovations, offering consumers greater choice and lower prices. Apple wasn’t the only company affected: the EU also identified Amazon, Google, Meta, Microsoft, and TikTok as gatekeepers to “core platform services.”

March was the deadline to comply with the new law and, guess what? Europe’s antitrust enforcer said Apple hadn’t. It said the company still needed to open parts of the operating systems that run its smartphones, tablets, and computers to potential competitors. So, on May 30, Apple filed an appeal with the European Union’s General Court in Luxembourg.

Apple’s argument seems sensible enough: granting third-party companies access to its operating systems, it argues, would compromise the security of customer data. But the case has echoes of Apple’s losing battle to defend its App Store. Last year, European regulators ordered the company to stop restricting what companies offering products on the App Store sold outside it without having to pay to Apple’s 30% commission. And last month, a U.S. federal judge ruled that Apple could no longer bar apps from the App Store that give customers external links enabling them to avoid Apple’s commission.

Apple also lost a battle to keep Texas from joining Utah in requiring that it verify the age of users downloading apps or making purchases through the App Store. Apple lobbied against the Texas bill, arguing it would require the company to store sensitive personal information about users of its devices. How that would differ from the information Apple already stores to secure the account all device users must create to access Apple’s in-device contacts and calendars apps as well as its store for music, movies, and third-party apps is unclear. Apple’s European defense argues that this information is sensitive enough not to share with potential competitors.

Conditions continue to darken, meanwhile, for Apple’s U.S. customers. The U.S. dollar is sliding amid concern that Trump is on the trade warpath again. After Trump accused China Friday of having “totally violated” their Geneva agreement from early May to suspend tit-for-tat tariffs, Beijing on Monday blamed Washington for “seriously violating” the agreement. Trump, still smarting from Wall Street’s embrace of the TACO (“Trump always chickens out”) trade, followed his China outburst by announcing that he would double his March tariffs on aluminum and steel, to 50%, as of June 4.

Also driving the dollar’s decline were the results of the Institute for Supply Management’s monthly survey of manufacturing purchasing managers. ISM’s Purchasing Managers Index fell in May for a fourth consecutive month to a weaker-than-expected 48.5. Anything below 50 signals a contraction in activity. Confusion about Trump’s tariffs is also slowing the pace of factory deliveries: ISM’s Supplier Deliveries Index rose to 56.1 in May from 55.2 in April. Contrary to its PMI, a Supplier Deliveries Index above 50 suggests a slowdown.