Apple admits regulatory pressure impacting services business

Apple has acknowledged that regulatory mandates forcing it to loosen App Store controls are starting to affect its services business, which is valued at over $100 billion. This marks a rare admission from the company that antitrust measures are impacting a core profit stream.

The company's latest financial results revealed that both revenue and profit margins for its services division fell short of Wall Street expectations. Apple also warned in a regulatory filing that it "may not receive any commission" if consumers purchase digital content through alternative payment systems.

Apple's statement provides the clearest signal to date that years of court rulings and regulatory actions in the U.S., Europe, and elsewhere targeting the App Store have begun to erode the commission income that underpins the company's high-margin services business.

Data from analytics firms Sensor Tower and Appfigures indicates a slowdown. U.S. consumer spending through the App Store fell 6% year-over-year in the second quarter, while Appfigures estimates Apple's App Store commission revenue in the U.S. has dropped 18% this year. Global App Store spending grew only 3% in the second quarter, down from 13% a year earlier.

Apple CFO Kevin Parikh has acknowledged that recent changes to App Store rules have had an impact on the services business. Previously, Apple had attributed performance variations to factors like currency fluctuations.