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Legal Fees, New Reguation Costs Could Impact Apple’s Bottom Line, Company Report Says

In Apple‘s annual report, the tech giant discussed the impact that various legal proceedings and new regulations around the world could have on its operations and financial conditions.

According to the report, the company’s legal proceedings, claims and investigations, along with the alleged magnitude of them, “has generally increased over time and may continue to increase.”

Apple mentioned in the report several examples of rival companies coming after Apple legally over patent infringement allegations, saying the plaintiffs are “frequently seek injunctions and substantial damages.” Apple said that, regardless of the merit of those claims, the lawsuits can prove expensive, costing time and disrupting day-to-day management.

In addition, regulations around the world, which Apple described as “complex and changing,” could expose it to more potential liabilities and increased costs. The regulations are wide in scope, including things like antitrust, privacy, data security and localization, consumer protection, advertising sales, billing and eCommerce, product liability, intellectual property and more, the report stated.

Complying can be “onerous and expensive,” Apple said, and it could also affect the company’s bottom line. The intense media and political scrutiny on companies of Apple’s size has only served to amplify the ways these things could affect the company’s revenue or relationships with partners, according to the report.

In addition, Apple said it is subject to numerous laws at federal, state and international levels over data protection of personally identifiable information. Those could lead to changes in the company’s practices or further legal proceedings, the report stated.

Apple, along with fellow Big Tech companies Amazon, Facebook and Google, has faced pushback from the European Union in the form of a new “hit list” that would target companies based on their market share of revenue and number of customers. While it’s unknown exactly what could come of the rules, it could consist of new injunctions or limits on some corporate actions. The issue, according to the U.S. House of Representatives antitrust committee, is that the companies have the potential to act as gatekeepers and pick winners and losers in various channels of distribution.

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