Large fines can sometimes have a bracing effect on share prices. Facebook shares jumped after a record-breaking $5bn fine from US regulators in 2019. Alibaba shares rose after Chinese regulators fined Ant Group. Penalties often end uncertainty about the outcome of investigations. On Monday, however, Apple’s first EU antitrust fine prompted the share price to drop 2.5 per cent.
At first glance, the €1.8bn fine for stifling competition in music streaming is not a lethal problem for the company. It is pocket change when compared with Apple’s global sales, equal to about 2 per cent of last year’s annual free cash flow. Appeals mean the case will be in court for years. Apple can argue that its own music service does not dominate the market.
The problem is that the EU fine does not mean the end of Apple’s regulatory battle. Around the world, more attempts are being made to put limits on tech company power. Slowly, Apple’s closed ecosystem is being chipped away.