Apple is facing new turbulence in China. Beijing is considering opening an
antitrust investigation into the App Store, targeting in particular its high commissions and restrictions on third-party payments. This news immediately caused the American giant’s stock to plummet.
The App Store under pressure
The heart of the problem? Apple’s infamous 30% commission on in-app purchases and the payment restrictions imposed on developers. The Chinese State Administration for Market Regulation (SAMR) is investigating whether these practices stifle competition and harm consumers.
This is not Apple’s first battle on this issue. In the United States, Europe, and elsewhere, the company has already had to defend its model against regulators and courts – the Epic Games case being a prime example.
This case is unfolding in a tense climate.
This investigation comes at a time of heightened tensions between the United States and China . Washington recently increased tariffs on certain Chinese products, and Beijing is retaliating by putting pressure on American technology companies . Google is already in the crosshairs, and now Apple is facing the counter-offensive.
Even though Apple’s revenue from services in China remains limited compared to other markets, opening up to third-party stores and services could disrupt its business model and further complicate its position in the country.
Apple is losing ground in China
Beyond regulatory issues, Apple is also facing a slowdown in sales in the Chinese market. According to Visible Alpha, iPhone shipments declined by 0.8% in the last quarter, partly due to a perceived lack of innovation in its latest models.
Some analysts believe that partnering with local companies could help Apple regain ground. But it would be a risky gamble in an environment where the rules of the game change frequently.
A regulatory puzzle to manage
Apple has already had to adapt its policies in Europe to comply with new rules, gradually opening iOS and iPadOS to alternative app stores . China could follow this trend, but with specific constraints related to local regulations and government censorship requirements.
With this impending investigation, Apple’s challenge will be to navigate the demands of Chinese regulators while preserving its business model . The outcome of this case could well redefine its future in China and influence the strategies of other American tech giants in the country.