China Finds Leverage Ahead Of Trade Talks: Beijing Mulls Probe Into Apple’s App Store Practices

Beijing appears to be reviving several antitrust investigations against US big tech companies. 

Financial Times reported on Tuesday that antitrust investigations into Google and Nvidia were being considered, while a new probe against Intel was pending. Bloomberg now reports that China’s antitrust watchdog is mulling over opening a formal probe against Apple. These investigations should be viewed as a strategic move by Beijing to increase leverage ahead of upcoming trade talks between President Xi Jinping and President Donald Trump.

Bloomberg, citing sources familiar with the matter, reported that China’s State Administration for Market Regulation (SAMR) is considering a potential probe into the world’s most valuable company over the 30% fee it charges app developers. The potential investigation will also review how Apple blocks third-party payment services in the App Store. 

The report continued:

The conversations stem from long-running disputes between Apple and developers such as Tencent Holdings Ltd. and ByteDance Ltd. over iOS store policies — a source of tension between the US company and regulators worldwide.

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Chinese regulators believe that Apple may be charging local developers unreasonably high fees, the people said. They think the barring of third-party app stores and payment methods also hinders competition and hurts local consumers, the people said. If Apple resists making changes, the government may launch a formal investigation, the people added.

“Last year, the company revamped its store practices in the European Union to meet the requirements of the Digital Markets Act. That’s led to third-party app marketplaces and outside payment methods,” Bloomberg noted.

The news follows an FT report one day ago on SAMR opening up a competition investigation into Google. The report did not clearly state the scope of the investigation into Nvidia. 

The tech investigations show that Beijing seeks leverage ahead of Xi’s trade talks with Trump. On Tuesday morning, US tariffs of 10% went into effect, with China retaliating with tariffs of its own. Separately, Trump struck multiple deals with Canada and Mexico to delay imposing 25% tariffs. 

In markets, Apple shares in New York slid nearly 3%…

If trade talks between the US and China sour, China will likely open an official probe into Apple, which would be yet another headache for Tim Cook. The CEO is already dealing with soft iPhone sales in the world’s largest handset market.