iPhone maker Apple (NASDAQ:AAPL) held talks with the U.S. Department of Justice (DOJ) last week to ward off an antitrust lawsuit against the company, Bloomberg reported. Legal representatives from Apple met with Assistant Attorney General Jonathan Kanter, who holds the authority to determine whether legal action should be taken, the report highlighted.
Regulatory Challenges
Antitrust regulators have been probing Apple’s business practices since 2019. They allege that Apple implemented software and hardware restrictions on its iPhones and iPads to prevent rivals from effectively competing.
Apple faced flak for its App Store practices, prompting the company to enact changes. Last month, Apple announced significant adjustments in its iOS, Safari, and App Store offerings in the European Union to comply with the Digital Markets Act (DMA). In January 2024, the company said it would permit U.S. developers to utilize alternative payment systems but charge a 27% fee for most digital purchases or 12% on subscriptions. With this background, let’s closely examine Apple’s legal and regulatory risks.
Apple’s Risk Analysis
Apple’s global presence and large operations expose it to economic, political, legal, and regulatory risks. Further, it is subject to various legal proceedings and government investigations.
As it faces several litigations, Apple’s legal and regulatory exposure, as indicated by TipRanks’ Risk Analysis tool, is slightly higher than the industry average. Apple’s legal and regulatory risks constitute 21.4% of its overall risk profile, exceeding the industry average of 20.3%.
What is the Forecast for Apple Stock?
Apple stock is up about 24.6% in one year. However, it is trading in the red so far in 2024 due to the pressure on its hardware sales.
Apple stock has a Moderate Buy consensus rating based on 16 Buys, eight Holds, and one Sell recommendation. Analysts’ average price target of $206.15 implies 12.88% upside potential from current levels.
