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Apple warns investors that regulatory pressure could cost it a pretty penny
Apple’s worldwide operations begin to gain scrutiny from antitrust authorities. In its latest annual report, the company warns that the growing hostility of regulators towards large corporations could lead to a significant drop in revenues.
Image Source: Getty Images
A separate concern for Apple, according to an excerpt from the company’s annual report published by the Financial Times, is the requirement of certain partners and regulators to reduce the commission for settlements within the applications of the proprietary ecosystem. Now the size of the commission is from 15 to 30%, but Apple claims that lowering the commission below this level will entail significant material consequences for the company. An estimate of the possible damage in quantitative terms is not given, but it is generally accepted that in such situations it should exceed 5% of the original amount.
Considering that Apple generated $ 275 billion in revenue and $ 57 billion in net profit in the fiscal year that ended, even a five percent drop in in-app revenue would result in billions of US dollars in revenue drop. Services and software applications generated $ 53.8 billion in revenue for Apple in fiscal year ended. In September, several developers have already taken up arms against Apple, demanding from it a decrease in the value of the commission for settlements within applications. European and North American regulatory authorities are interested in the topic. Apple CEO Tim Cook finds it difficult to quantify the potential consequences of antitrust investigations against the company.