Tech

Apple drops on report that Justice Department is eyeing antitrust probe

Key Points
  • The tech-heavy Nasdaq Composite index fell Monday after similar regulatory headlines dinged tech giants Google, Amazon and Facebook.
  • The possible Apple probe is linked to a potential Google probe, Reuters reported, and stems from meetings between the DOJ and the FTC. 
  • The headlines together paint a daunting picture for Silicon Valley and the stock market's most valuable companies.
Apple CEO Tim Cook
Getty Images

Apple shares ticked lower Monday after a Reuters report saying the Justice Department is considering a probe of the iPhone maker.

The agency has been given jurisdiction to probe the company's practices as part of a broad review into potential anti-competitive behavior among big tech companies, Reuters reported, citing two sources.

The stock fell nearly 2% following the report, after trading higher earlier in the day. The shares pared losses to end the session 1% down. Apple and its CEO, Tim Cook, presented updates to the company's central software at its annual Worldwide Developers Conference on Monday.

The tech-heavy Nasdaq Composite index also fell 1% Monday after similar regulatory headlines dinged tech giants Alphabet, Amazon and Facebook.

Earlier Monday, the Wall Street Journal reported that the Federal Trade Commission will examine how Facebook's practices affect digital competition. The Washington Post reported over the weekend that Amazon has come under heightened scrutiny by U.S. regulators. And on Friday, the Journal reported that the DOJ is preparing a probe of Google, sending shares of parent company Alphabet down more than 7% at one point Monday, before they regained some ground and ended with a drop of 6.1%

The possible Apple investigation is linked to the Google probe, Reuters reported, and stems from meetings between the DOJ and the FTC.

The headlines together paint a daunting picture for Silicon Valley and the stock market's most valuable companies. Big tech has long faced scrutiny from European regulators, but has so far shrugged off calls for government regulation in the U.S.

Apple has drawn increased criticism in recent months for what some — including streaming giant Spotify — see as anti-competitive behavior in the App Store. Apple owns and operates the online marketplace, collecting subscription fees from developers.

The so-called Apple tax accounts for a sizable percentage of Apple's burgeoning services revenue segment, but draws the ire of developers who, in some cases, compete with Apple's own apps in the store.

Spotify's EU complaint against Apple, filed in March, is pending investigation by European authorities. Apple has said Spotify wants to enjoy the benefits of a free app, without it being free, according to a separate Reuters story on Monday

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