Apple is facing a potential $30 billion fine for allegedly breaking competition laws in the European Union. The European Commission has accused Apple of violating the EU’s Digital Markets Act by imposing restrictions on app developers within its App Store. According to a report released by the commission, Apple’s policies prevent developers from directing customers to other options for content and pricing, thus limiting competition.
The commission’s preliminary findings indicate that Apple’s terms with developers prohibit them from providing pricing information or promoting alternative channels within the app. Instead, developers are required to include a link in the app that redirects customers to a web page where they can learn more about alternatives. If a customer makes a purchase of digital goods or services through that link within a week, the developer must pay Apple a fee.
Margrethe Vestager, the executive vice president responsible for competition policy at the Commission, stated that Apple does not fully allow steering, which is crucial to reducing developers’ dependence on app store gatekeepers and ensuring that consumers are aware of better offers. Apple has stated that it has made changes to comply with the Digital Markets Act and is confident that its plan complies with the law. The company believes that more than 99% of developers would pay the same or less in fees under the new business terms.
If found guilty, Apple could face a penalty of up to 10% of its global revenue, which could amount to more than $30 billion in fines based on recent financials. This amount could double if the European Commission determines that Apple repeated the offense. The final findings of the investigation are expected to be concluded within a year from when it started in March 2024.
In addition to the potential fine, the Commission has also opened another investigation into Apple’s Core Technology Fee. This fee requires developers of third-party app stores and apps to pay a small fee to Apple for every installed app and involves the process of downloading and installing these alternative app stores, as well as the eligibility requirements for developers offering these alternatives.
These charges mark the first significant action taken by the Commission against major tech companies, which it has identified as “gatekeepers.” Apple’s regulatory challenges in the EU have also influenced changes the company has made in the U.S., such as adding a USB-C connection to the iPhone 15 and upcoming enhancements to text messaging in iOS 18. The outcome of these investigations could have significant implications for Apple and other tech giants operating in the EU.