Apple’s staring at a possible $38B EU fine as regulators ramp up the pressure
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An Apple a day… doesn’t keep European Union regulators away. They charged Apple yesterday with violating the Digital Markets Act (DMA) over what they said are unlawful restrictions on app creators. If Apple is found to have violated EU rules, it could be hit with a whopping penalty of up to 10% of its global revenue. At $383B last year, that could = a $38B fine. The iPhone maker, which has been trading places with Microsoft and Nvidia as the world’s most valuable company, is the first biz charged with violating the DMA.
Point/counterpoint: EU regulators say Apple’s policies limit app makers’ ability to steer customers to deals outside Apple’s App Store. Apple says it’s in compliance with the law and that its fees are a fair trade for space on its massive platform.
TL;DR: The DMA, which EU lawmakers passed in 2022, aims to boost competition in tech. The act designates Alphabet, Amazon, Apple, Meta, and Microsoft as digital “gatekeepers.”
Planting seeds: The EU’s charges are preliminary. A final ruling is expected next March.
Shakin’ the Apple tree… Regulators have taken a bite out of Apple this year. In March, the EU fined it nearly $2B over the cut of subscription fees (up to 30%) it was taking from music apps like Spotify, which regulators deemed stifling. The US DOJ also sued Apple that month, accusing it of illegally maintaining an iPhone monopoly.
Regulators are betting on competition… US and EU watchdogs are hoping that tougher tech rules will lead to more competition, potentially helping customers and newer businesses. But that stricter stance could also cause consumers to miss out. That’s what happened last week when Apple said it wouldn’t roll out some AI features in the EU until next year because of DMA concerns.