Will antitrust investigations blunt Apples share price?
A pples [AAPL] share price has been flat so far this year, with gains of just 3.1% in the year to date (through 29 June). After a rapid surge in January, Apples share price fell to earth on 8 March when it closed at $116.36, 12.1% down for the year and 19.8% below its previous peak of $145.09, which it hit during intraday trading on 25 January. In early April, Apples share price recovered to the $130 mark, but tailed off again with a slump to $122.77 on 12 May. There has been a steady rally in Apples share price since then, which has seen its price increase to close 29 June at $136.33. This puts Apples share price 51.7% above its level in the year-ago period. However, the company is now facing the latest in a string of antitrust probes that are affecting many big tech stocks, and a negative outcome could have a serious impact on Apples share price. Upsetting the Apple cartel  Germanys Federal Cartel Office has opened an investigation into Apples digital ecosystem, and the extent to which this has been used to establish market dominance for the firm. The App Store will reportedly be a primary focus for the regulator, given the degree of influence, it gives Apple over the actions of third parties. Complaints from app developers have centred on the requirement that developers use Apples own in-app purchase system, purchases through which generate a 30% commission for Apple. There are also complaints relating to iOS 14.5s restrictions on user tracking as well as against Apples own apps being pre-installed on its products. Andreas Mundt, head of the Federal Cartel Office, said in statement that an ecosystem which extends across various markets could indicate that a company is of paramount significance across markets, according to the Financial Times. Beside assessing the companys position in these areas, we will, among other aspects, examine its extensive integration across several market levels, the magnitude of its technological and financial resources, and its access to data.  Beside assessing the companys position in these areas, we will, among other aspects, examine its extensive integration across several market levels, the magnitude of its technological and financial resources, and its access to data - Andreas Mundt, head of the Federal Cartel Office  The investigation follows probes by the regulator into big tech giants Facebook [FB], Google [GOOGL] and Amazon [AMZN] over recent months. This in turn is playing out against a backdrop of massively increased scrutiny of big tech firms on both sides of the Atlantic, with analysts such as Laura Petrone of GlobalData expecting more on the horizon. The ECs [European Commission] proposed Digital Markets Act aims to constrain platforms so that they dont become monopolies, Petrone told Variety. This is increasingly viewed as a desirable solution by antitrust regulators worldwide, and more recently the US House of Representatives has introduced five different bills seeking to tame the power of the worlds largest technology companies.  The USs stance on the big tech clampdown was emphasised by president Joe Bidens promotion of antitrust legal scholar and staunch big tech critic Lina Khan to head the Federal Trade Commission. Her appointment on 15 June saw Apples share price slip 0.6%. A May clash between Apple and Epic Games in California covered similar ground to the German probe, with the final verdict awaiting the announcement. This is increasingly viewed as a desirable solution by antitrust regulators worldwide, and more recently the US House of Representatives has introduced five different bills seeking to tame the power of the worlds largest technology companies - Laura Petrone of GlobalData  Apple defended itself by saying its iOS app economy supports more than 250,000 jobs in Germany, with its App Store giving developers the scope to share their passion and creativity with users around the world, adding that the company looked forward to an open dialogue with antitrust authorities. According to The New York Times, Tim Cook (pictured above), Apples CEO, delivered a warning about how rushed antitrust bills could disrupt its iPhone business. Investors dont appear to be fazed, however. Apples share price increased 1.4% on 21 June when the investigation was announced. Generational gains  The investigations havent had a noticeable impact on the tech industrys performance as a whole either. The Invesco QQQ Trust [QQQ], which tracks the tech-heavy Nasdaq index, gained 13.4% in the year-to-date (through 29 June), with gains of 12.2% in the month and a half since 12 May alone. Apple is the funds largest holding at 10.85% as of 29 June, so any lag on Apples share price would impact the funds performance. With the App Stores rise to dominance symbolising a generation that spends unprecedented amounts of time on their phones, it is appropriate that Apple is also held by the Global X Millennial Consumer ETF [MILN]. Apples share price is a smaller factor in this fund, however, it being the tenth-largest holding at 3.06% of net assets as of 29 June. The Global X Millennial Consumer ETF has outperformed the Invesco QQQ Trust in the year to date, gaining 16.1%.