Apple (NASDAQ:AAPL) is fighting back after the European Commission ordered it to make iOS more compatible with third-party products under the Digital Markets Act, filing an appeal May 30 with the EU General Court in Luxembourg.
The March order requires Apple to open more APIs and data flows so competitors can integrate deeper into its ecosystem, but Apple argues these interoperability requirements threaten the seamless user experience and impose unreasonable, costly processes that stifle innovation. A spokesperson warns that handing sensitive user datafrom notification content to Wi-Fi network historyto third parties poses massive privacy and security risks for its EU customer base.
Apple contends the rules unfairly single it out, jeopardizing its ability to launch new features in Europe and potentially delivering an inferior user experience to consumers. Investors should care because a protracted legal battle could delay any mandated changes, influence App Store dynamics, and create uncertainty around iOS feature rollouts in Apple’s second-largest market.
With the appeal now pending, markets will watch for interim rulings or settlement talks that could shape how much Apple must open its tightly controlled ecosystem to rivals.
This article first appeared on GuruFocus.
