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Apple Threatened with Probe over New App Store Regulation in South Korea – Report
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Apple Threatened with Probe over New App Store Regulation in South Korea – Report

Apple (AAPL) is facing a regulatory headache in South Korea. Reuters reports that the iPhone maker could be the subject of a probe over new legislation requiring it to stop forcing app developers to use its payment systems. AAPL shares rose 0.75% to close at $144.84 on October 17.

Apple designs, manufactures, and sells smartphones, personal computers, tablets, wearables, and accessories and offers a range of related services.

The Telecommunication Business Act, which went into effect last month, requires the likes of Apple and Google (GOOGL) to allow developers to choose the payment systems of their choice. The law came into effect as South Korea sought to curtail tech giants’ market dominance and stop the companies from charging commissions on in-app purchases.

According to Reuters, The Korea Communications Commission could ask Apple to issue a new company policy giving third-party payment systems greater autonomy. Should the tech giant fail to comply with the new measures, the agency could be forced to embark on a fact-finding probe that could result in fines and penalties if the company is found guilty. (See Top Smart Score Stocks on TipRanks)

Unlike Apple, Google, which is also one of the companies targeted by the new law, has already indicated its willingness to comply with the law. The tech giant says it will allow third-party payment systems and is open to discussing the matter with the regulator.

Meanwhile, Evercore ISI analyst Amit Daryanani has reiterated a Buy rating on the stock with a $180 price target, implying 24.28% upside potential to current levels. According to the analyst, investors should disregard reports that Apple is on course to cut iPhone production by as much as 10 million units. Daryanani maintains that supply issues are transitory, and his checks show robust demand for the iPhone.

Consensus among analysts is a Strong Buy based on 19 Buys and 6 Holds. The average Apple price target of $169.86 implies 17.27% upside potential to current levels.

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