According to the Netherlands Authority for Consumers and Markets (ACM), the tech giant Apple Inc. (NASDAQ: AAPL) has permitted different payment methods in Dutch dating applications to comply with European and Dutch competition rules. However, app developers have recently been exclusively using Apple’s in-app payment method.
Shares of Apple closed 3.86% lower on Friday to close at $137.13.
Background
Following an investigation into Apple’s business operations, the market regulator revealed that Apple did not allow dating app developers to use any other payment system. They were asked to use only Apple’s payment method. Apple charged commissions of 15%-30% on digital goods purchases for the use of its system.
Consequently, ACM imposed periodic penalty payments on Apple to make changes to its policies. As a result, the sum of all penalty payments came in at 50 million euros before the iPhone maker agreed to allow other different payment methods despite going through court appeals.
Nevertheless, Apple will continue to charge commissions from dating app developers on sales made outside the company’s in-app payment system, but at a reduced rate.
Official Comments
Martijn Snoep, Chairman of the Board of ACM, said, “We want everyone to be able to reap the benefits of the digital economy…Apple avoided that responsibility, and abused its dominant position vis-à-vis dating-app providers. We are glad that Apple has finally brought its conditions in line with European and Dutch competition rules.”
Apple’s update stated, “We don’t believe some of these changes are in the best interests of our users’ privacy or data security. Because Apple is committed to constructive engagement with regulators, we’re making the additional changes at the ACM’s request. As we’ve previously said, we disagree with the ACM’s original order and are appealing it.”
Wall Street’s Take
Having a bullish stance on Apple, Needham analyst Laura Martin maintained a Buy rating and a price target of $170 (23.97% upside potential) on Apple.
Martin said, “We believe the right way to value AAPL is based on the lifetime value (LTV) per user and that AAPL’s M1 and M2 chips (“Apple Silicon”) are allowing it to integrate its hardware across devices and to innovate its software features faster. Both lock consumers in, making it harder to leave the iOS ecosystem.”
Consensus among analysts is a Strong Buy based on 21 Buys and 6 Holds. The average Apple stock forecast price of $187.22 implies 36.53% upside potential from current levels. Shares have gained 5.7% over the past year.
Investors Remain Positive
TipRanks’ Stock Investors tool shows that investors currently have a Positive stance on Apple, with 1.6% of investors maintaining portfolios on TipRanks increasing their exposure to AAPL stock over the past 30 days.
Bottom-Line
Though Apple is hovering near its 52-week low price, high analyst ratings, the company’s dominant position, and long-term prospects indicate optimism. As a result, investors’ data on TipRanks’ Stock Investors tool shows that investors are building a position in Apple at the current level, considering it an attractive buying opportunity.
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