Apple shares fell on Wednesday after Bloomberg reported that Chinese regulators are weighing whether to launch an investigation into the company’s App Store fees and policies. The State Administration for Market Regulation, or SAMR, is currently evaluating whether to open a formal probe into Apple’s practices, including its commission on in-app purchases and restrictions on third-party payment providers.
As of London time, 09:34 a.m., Apple shares traded down 2.66% in premarket trading. This has called for concern by investors partly because of the heavy influence that Apple shares have had in the Chinese market.
The Accusations Against Apple
The probe focuses on the case of Apple’s policy in its App Store and, more generally, on the required use by developers of the company’s in-house payment system, from which Apple takes up to a 30% commission. Regulators also addressed concerns about restrictions on third-party payment services and independent app stores imposed by Apple.
Bloomberg reported that SAMR hasn’t yet made a final decision on whether it will go ahead with a formal investigation. When CNBC reached out to Apple and China’s Ministry of Commerce, both declined to comment on the matter.
This comes at a time when the United States and China are at the peak of their trade tensions under the leadership of President Donald Trump who has served two terms. Regulatory pressures facing Apple’s operations in China echo what is happening in other markets such as the European Union, where new regulations by the Digital Markets Act have made Apple allow non-Apple app stores and alternative payment methods.
Apple’s Regulatory Hurdles Across the Globe
App Store policies by Apple have been under scanning from numerous global regulatory bodies in recent times. In the European Union, it was forced to open up its App Store for third-party developers on account of the DMA. Significant changes were thus brought about in the functioning of Apple within the EU. This goes ahead to provide a precedent and shape regulatory actions within other markets.
If China does decide to pursue an official investigation, Apple could suffer additional regulatory and financial losses in one of its most important markets. Sales in Greater China fell 11% year-on-year in the December quarter, mainly due to increased competition from domestic smartphone makers such as Huawei.
The Competitive Landscape in China
Apple has relied on China both as a significant market and also as its primary source of supply chain hub for long. But with new competition from Chinese tech giants, this giant faces increasing rivalry. One of the hardware giants that have registered notable growth lately in the premium smartphone is Huawei. In fact, according to market trends, Huawei is scraping of the customer base of Apple by launching new flagship handsets and an increasingly large ecosystem of services with new applications and features.
Beyond smartphones, Apple’s ecosystem—including its App Store—has been instrumental in driving its revenue growth. A potential investigation in China could disrupt Apple’s carefully curated ecosystem, forcing it to make concessions that could impact its profitability.
Potential Impact of the Investigation
If Chinese regulators move forward with a formal probe, Apple may face several possible outcomes:
Fines and Penalties: Apple could suffer monetary penalties in case it is proven to have breached the Chinese market laws.
Policy Adjustments: The firm would also be restricted to review its policies for App Store, which may enable third-party payment gateways and new alternative app stores in China.
Market Share Loss: Greater regulatory scrutiny and competition may speed up Apple’s loss in terms of market share in China, to the advantage of domestic players like Huawei.
Investor Uncertainty: The news already affects the price of Apple stock, and ongoing uncertainty may add to market volatility.
Broader Implications for the Tech Industry
China’s regulatory measures are not specific to Apple alone. In a recent development, the SAMR also launched an antitrust probe against Google. Moreover, news has surfaced stating that U.S. semiconductor chip giant Intel might also be targeted in China. These trends hint at Chinese regulators increasing their monitoring of leading American tech companies in the country.
For Apple, the implications of a regulatory probe in China are not just financial but also go beyond immediate financial consequences. The company’s long-term strategy may require adaptation to evolving regulatory landscapes, not only in China but globally.
Apple’s stock falls after investigation reports by China, reiterate the heavyweight that the company needs to overcome for it to continue dominating international markets. Considering that it is under scrutiny by regulators in both the EU and China, it may be compelled to make major changes to its policies on the App Store.
As China weighs whether to formally investigate Apple, the tech giant and its investors stay on edge, watching closely for any regulatory decisions that could reshape the company’s operations in one of its most important markets.

Frequently Asked Questions (FAQs)
Why did Apple’s shares decline in premarket trading?
Apple’s shares declined after Bloomberg reported that Chinese regulators are mulling an investigation into the company’s App Store fees and restrictions on third-party payment providers. The uncertainty of the potential probe has worried investors.
What is the issue of China with Apple’s App Store policies?
Chinese regulators are scrutinizing Apple’s policy of taking a 30% commission on in-app purchases and restrictions on third-party payment systems. The probe could also include whether Apple is resorting to monopolistic practices by limiting independent app stores.
How is Apple responding to regulatory pressure in other markets?
In the European Union, Apple was made to alter its App Store policies under the Digital Markets Act, enabling third-party payment services and non-Apple app stores. If China decides to proceed with an investigation, then something similar has to be implemented.
What would be the potential impact of a Chinese probe on Apple’s business?
If the investigation goes ahead, Apple could face fines, policy changes, and a decline in market share in China. This would have a further effect on its stock price and overall revenue from one of its largest markets.
Is Apple the only U.S. tech company under scrutiny in China?
No, China also launched an antitrust investigation into Google and said it was contemplating a probe of U.S. chipmaker Intel. The measures signal a wide-ranging regulatory clampdown on American tech companies doing business in China.

I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.