The State Administration for Market Regulation of China, or SAMR, is getting ready to initiate an antitrust investigation against Apple’s App Store policies. In particular, the focus will be on Apple’s 30% commission on in-app purchases and its ban on external payment services and other app stores. This is in addition to other measures taken by Chinese regulators as a whole, focusing on U.S. companies.
Background of the Investigation
This probe is part of China’s continuing efforts to govern the operations of foreign tech firms in the country. Bloomberg says that talks between Apple and the Chinese government began in 2024, citing regulators’ concern over Apple’s dominance in the digital marketplace and its influence on Chinese developers.
Key areas under investigation
The SAMR is specifically studying the commission of Apple, which can go as high as 30% of in-app purchases made through the App Store. This has become a global contentious issue because most critics believe the fees are exorbitant and disadvantageous for app developers. The investigation, apart from commission, also involves Apple’s rules on external payment options and its ability to offer third-party stores within its domain.
While Apple and SAMR haven’t addressed the situation publicly, its shares declined by 2.6% in U.S. premarket trading after news regarding the investigation surfaced. The decline was a reflection of the concerns of investors over the outcome of the probe on Apple’s revenue model from its App Store.
Background of Relations Between the US and China
The probe against Apple comes when tensions between the United States and China are running at a high pitch. In fact, last week, China revealed a set of measures that it said were against several American companies, among them technology leader Google and fashion house PVH Corp, owner of brands such as Calvin Klein and Tommy Hilfiger. The new U.S. tariffs on Chinese goods started on Thursday.
Google Under Scrutiny for Antitrust Violations
Aside from Apple, Google is also under antitrust scrutiny in China. SAMR suspects the company of violating the country’s anti-monopoly laws although details on the specific aspects involved are not released yet. But experts believe that the probe could be related to Google’s dominance in the Android operating system market where they were accused of imposing various limitations on the Chinese mobile phone manufacturers in terms of technology and business operations.
Impact on U.S. Businesses in China
These investigations reflect China’s ongoing efforts to ensure fair competition within its domestic market. As China increasingly targets foreign tech firms, many U.S. companies are feeling the pressure, especially with regard to antitrust concerns. The developments are expected to affect the business operations of these companies, particularly those in the technology sector.
China’s Broader Efforts to Regulate Foreign Companies
China’s Ministry of Commerce has also included PVH Corp and U.S. biotech firm Illumina on its “unreliable entity” list, in a move that would keep the country’s regulator’s hammers swinging against U.S. companies. These measures are a part of China’s all-around approach towards having foreign businesses respect its domestic regulations especially in sensitive sectors such as technology and pharma.
China is investigating Apple’s App Store after making several other moves to reduce foreign tech companies’ stranglehold on the Chinese market. While regulators have pinned their attacks on both giants – first on Apple and more recently on Google, as well as other U.S. firms such as Starbucks – it’s evident China is stepping up its approach on market competition. As the investigation unfolds, the stakes will be closely watched by the tech industry because of the far-reaching implications for global business practices and the operations of multinational tech companies in China.