Big setback for iPhone maker Apple as watchdog probes abuse of privacy policy

iPhone maker Apple faces an investigation over whether its rules on privacy and personal data processing are abusive. 

| Updated on: Aug 21 2022, 22:31 IST
Apple rolled out an update of its iOS operating system in April with new privacy controls designed to limit digital advertisers from tracking iPhone users. (REUTERS)
Apple rolled out an update of its iOS operating system in April with new privacy controls designed to limit digital advertisers from tracking iPhone users. (REUTERS)

Apple faces an investigation in Poland over whether its new rules on privacy and personal data processing for iOS devices violate competition law, Polish antimonopoly watchdog UOKiK said on Monday.

Apple rolled out an update of its iOS operating system in April with new privacy controls designed to limit digital advertisers from tracking iPhone users.

The Polish regulator said Apple's new rules have significantly reduced the ability of third-party apps to obtain personal data in order to send personalised adverts.

"We want to examine whether Apple's actions may be aimed at eliminating competitors in the market for personalised advertising services, the objective being to better sell their own service," UOKiK President Tomasz Chrostny said in a statement.

"We will investigate whether this is a case of exclusionary abuse of market power."

The regulator said it was investigating the issue, but the proceedings are not directed against a particular company.

Apple did not immediately reply to a request for comment.

The European Union's tech chief Margrethe Vestager has also warned Apple against using privacy and security concerns to fend off competition on its App Store.

Apple Nears $3 Trillion in Market Value. Here's Some Context

(Bloomberg) -- After a decades-long run as one of the world's best-performing stocks, Apple Inc. is on the verge of reaching $3 trillion in market value. That's bigger than the entire German equity market. Or the U.K. economy.

The iPhone maker needs to rise just another 6.8% to become the first company to achieve the milestone, less than four years after it first surpassed $1 trillion.

“It's a phenomenal achievement and highlights the incredible dominance of U.S. tech firms,” said Craig Erlam, senior market analyst at Oanda. “And there's so much still to come from Apple, which makes you wonder what milestone they'll pass next and how big they can become.”

Apple became the world's most valuable business thanks to a steady stream of products that have captivated consumers. Now, with markets wobbling because of concern that higher interest rates and the coronavirus will undermine economic growth, investors view the company as a relatively safe place to park their money thanks to its consistent sales growth and hefty cash balance.

Since the end of the 1990s, Apple shares have returned a whopping 22,000%, equal to about 28% a year. The S&P 500 has returned 7.5% annually in the same period. A few other tech stocks have done better -- Nvidia Corp., a maker of graphics-processing chips, has returned 31% annually, while streaming giant Netflix Inc. is up 39% a year since its 2002 initial public offering -- but Apple dwarfs them both in size.

The iPhone maker jumped 3.5% to $171.18 Tuesday to lead the advance in the Nasdaq 100 and S&P 500 stock indexes. The Cupertino, California-based company trades at 30 times profit projected over the next 12 months, compared with an average of 22 times for companies in the S&P 500.

Morgan Stanley analyst Katy Huberty argues the stock is undervalued when considering revenue contributions expected in coming years from new products like augmented and virtual reality and autonomous vehicles.

“Apple should benefit from a flight to quality especially as upside from new product categories gets priced in,” said Huberty, who raised her price target to a Wall Street high $200 on Tuesday.

It wasn't always so: In late 2000, Apple had a market value of just $4.5 billion, and investors were fleeing the stock, which traded for almost the value of the cash the company had in the bank. Co-founder Steve Jobs had returned to the helm in 1997 but had failed to revive its fortunes, and the iPod and the iPhone were still off in the future.

Now, investors can't get enough of the stock. In a sign that mom-and-pop traders are chasing Apple, short-term bullish call options saw extreme buying activity. Four of the 10 most-active options contracts on U.S. exchanges Tuesday were calls on the iPhone maker.

What's more, its shares got another boost from a late-breaking Nikkei report that the company asked suppliers to ramp up iPhone output from November to January. That comes a week after a Bloomberg News reported that iPhone demand was slowing.

Apple “is kind of in that sweet spot of not being too expensive, having a nice mix of products and services, and being a great innovator across its entire product line,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

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First Published Date: 13 Dec, 20:16 IST
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