Apple Could Be Fined $38 Billion
The EU is accusing Apple of violating the Digital Markets Act, a move that could cost the company $38 billion if it is found guilty. The actions follow complaints that the company is not doing enough to comply with regional DMA rules.
The DMA rules, which went into effect for Apple in March, are designed to encourage fair competition and more open markets. The law would have required Apple to allow steering, a practice by developers to direct users to payment methods outside the App Store, as well as to third-party app stores . Technically, Apple complied with these requirements, but the developers accused the company of violating the spirit of the law.
Epic Games CEO Tim Sweeney called Apple’s implementation of the DMA policy ” malicious enforcement ,” continuing a feud that began when Apple, pre-DMA, removed Fortnite from the App Store for directing users to Epic’s own payment methods. The developer called the company’s “garbage fees” on external payments and third-party stores, and now it looks like the EU agrees.
In a press release , the European Commission said it was formally accusing Apple of violating governance rules. The company currently only allows developers to link to an external website, which the EU says limits their ability to effectively market products or charge consumers. Additionally, the company charges developer fees for digital purchases that consumers make “within seven days of joining.”
EU Commissioner Margrethe Vestager, who heads European competition policy, said: “Our provisional position is that Apple is not allowed to fully govern.” In addition to the anti-governance charge, Vestager said, the Commission has also opened proceedings to investigate compliance with third-party app store policies, focusing on the company’s underlying technology fees and the complex process users must follow when installing a third-party app. the shops.
“For too long, Apple has crowded out innovative companies, depriving consumers of new opportunities and choices,” EU Internal Market Commissioner Thierry Breton wrote in X , previously on Twitter.
Apple is just the first company to come to the Commission’s attention, as DMA rules also apply to Alphabet (Google), Amazon, Meta, Microsoft and ByteDance (TikTok). The commission said it is also currently investigating non-compliance by Alphabet and Meta, as well as gathering “facts and information” from Amazon.
If Apple is found guilty of infringement, the EU could recover up to 10% of its annual global revenue from the company, or about $38 billion based on last year’s revenue . For a repeated offense, the fine may increase to 20%.
Apple did not immediately respond to Lifehacker’s request for comment, but Apple spokesperson Peter Ajemian told The Verge: “Over the past few months, Apple has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission… we will continue to listen and engage with the European Commission.” .
Apple has already been fined by EU antitrust regulators this year , paying nearly $2 billion in March following an antitrust complaint filed by Spotify in 2020.