What happened
Rather uncharacteristically, shares of Apple (AAPL 1.27%) were outpaced by the S&P 500 index on Monday. The company's stock bumped only 0.2% higher, while the index notched a comparatively mightier 0.6% increase. The usually buoyant company was hit with a fresh challenge from a top regulator.
So what
The European Commission (EC), the executive arm of the 27-nation European Union, formally accused Apple of engaging in antitrust practices. The EC sent a statement of objections outlining its concerns, in this case stating that the company has abused its dominant position in the market for mobile wallets in its iOS ecosystem.
Image source: Getty Images.
In a press release on the matter, the EC quoted executive vice president Margrethe Vestager as saying, "We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices."
She added: "... we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules."
In a media statement disseminated on Monday, Apple responded, saying, "Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC [near-field communication, a technology that allows mobile devices to connect to each other] while setting industry-leading standards for privacy and security."
Now what
At this point, it's hardly shocking when a big regulator comes after Apple. The tech giant is famously aggressive and competitive, and it always makes a strong effort to maintain whatever competitive edge it can develop.
It'll likely stick to its playbook of aggressive, sustained defense in this case, which is therefore likely to drag out for months or even years. Investors shouldn't take this as any kind of existential threat to the company.
