Why Apple's $2 billion fine is a $80 billion problem

• Apple's stock fell Monday morning after EU regulators slapped the company with a $2 billion fine.
• The fine is part of the EU's push to get Apple to open up its App Store.
• Investors are trying to figure out how much opening the App Store will hurt the company long term.

European regulators have fined Apple $2 billion for violating antitrust rules.

But that's not the worst news Apple is dealing with Monday.

Apple's real problem is the way investors in the world's second-most valuable company are reacting to the fine: In the first few hours of trading on Monday morning, they've pushed Apple's stock down by as much as 3%.

Which means, at the moment, that Apple's $2 billion fine has cost it some $80 billion in market cap.

Context: Apple has already said it will appeal the European Commission's fine, which came out of a long-running battle between Apple and Spotify. And you can over-read any day-to-day — and certainly hour-to-hour — movement in a stock price at your peril. Apple is still up some 14% over the last year, for instance.

But if you're still inclined to look for a narrative about Monday's stock move, I'm happy to oblige.

It goes like this: For years, Apple investors have been asking the company when the next world-changing invention like the iPhone would arrive. And for years, it has been clear that there is no next iPhone.

Apple continues to create monstrously successful new products — see, AirPods, Apple Watches — but they are not New iPhones because there's never going to be a New iPhone. In 2023, Apple reported that its yearly sales had declined by 3%.

Which is one of the reasons that Apple has been stressing the growth in its services business — which is partly subscription services like Apple Music and Apple TV+, but is really the money Apple makes from its powerful app store. Which is why Apple tries very, very hard to fight each and every attempt to get it to open up its app store.

It's no secret that Europe was going to punish Apple in its Spotify dispute — regulators had already announced a guilty verdict a year ago. But as recently as a month ago, the conventional wisdom was that Apple's fine was going to be something in the $500 million range.

So super-sizing that penalty seems to send a signal: Europe is going to try very, very hard to force Apple to open up the App Store. And investors are trying to figure out how much that will hurt the company long-term.