Apple could soon be hit with the first major fine under the European Union’s Digital Markets Act (DMA), marking a critical moment in the EU’s fight to curb Big Tech’s monopolistic practices. The European Commission is preparing to penalize Apple for its policies on the App Store. Sources suggest that the decision, expected this month, could see Apple face a fine of up to 10% of its annual global revenue, a sum that could reach $38 billion if Apple is found to be a repeat offender.
The DMA, which came into force in May 2023, was introduced as a comprehensive regulatory framework aimed at curbing anti-competitive behavior among the world’s largest technology companies, including Apple, Google, Amazon and Meta. The law designates these companies as “gatekeepers” and requires them to comply with a set of rules designed to create a fairer digital marketplace. According to the DMA, these companies are prohibited from using certain restrictive practices that could stifle competition, such as favoring their own products or services and limiting developers’ ability to interact directly with users outside of controlled platforms.
The European Commission’s investigation into Apple was triggered by complaints from streaming giant Spotify, which argued that Apple’s policies prevented developers from offering cheaper subscriptions outside the App Store, where Apple takes a 30% commission. % on purchases. In March 2024, Apple faced a €1.84 billion ($2 billion) fine for similar practices under traditional EU competition laws.
As Apple faces this latest regulatory challenge, it has already begun making changes to its App Store policies in the EU to align with the DMA. Earlier this year, Apple introduced compliance measures, including reducing App Store fees and easing restrictions on alternative app distribution. However, these efforts have not fully satisfied regulators.
If Apple fails to comply with the DMA requirements, the Commission could also issue daily fines of up to 5% of Apple’s average daily revenue until compliance is achieved.
European Commissioner Margrethe Vestager, known for her aggressive stance on Big Tech regulation, could end her mandate with this historic action as a statement on digital market fairness.
Representatives for Apple and the European Commission declined to comment.