Apple Shares Fall After Supreme Court Allows Consumer Lawsuit Over App Store

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UPDATED with closing stock price. Apple’s stock opened Monday at its lowest point in six weeks due to the escalating U.S.-China trade war, only to slump further on an unfavorable ruling by the U.S. Supreme Court.

Shares closed at $186.55, down nearly 5.4%. Despite the decline, in 2019 to date, the stock has gained 18%, but Wall Street analysts are cautioning that the company may need to lower its financial forecasts, which could prompt more selling.

By a 5-4 margin, the high court decided to uphold a lower court’s decision to permit a lawsuit by consumers to go forward. The suit charges Apple with gouging consumers through what it describes as a monopoly on apps in the App Store.

At the heart of the complaint is the so-called “Apple tax,” a 30% fee on apps in the App Store that has also prompted a complaint to the European Commission by streaming music rival Spotify.

The dispute with China, which was the subject of numerous weekend tweets by President Trump, has sent broader markets well into the red.

Apple is among several manufacturers and retailers likely to be affected by escalating tariffs being imposed by the U.S., which have increased the cost of a range of consumer products. Morgan Stanley analyst Katy Huberty wrote in a research note to clients that the tariffs could increase the cost of making an iPhone by $160. That presents a dilemma for Apple, which will either have to raise prices on the devices, whose sales are already starting to flag, or cut its outlook for 2020 earnings.

This article was printed from https://deadline.com/2019/05/apple-shares-fall-after-supreme-court-allows-consumer-lawsuit-over-app-store-1202613544/