Key Takeaways
- This month, Apple is anticipated to be the first business to face penalties under the EU’s new Digital Markets Act (DMA).
- The upcoming fine comes after Apple was hit with a €1.84 billion fine in March for restricting competition on its App Store.
- The DMA may have an effect on Apple’s market practices in Europe since it permits fines of up to 10% of a company’s worldwide revenue.
Apple is expected to be the first business to face penalties under the recently passed Digital Markets Act (DMA) in the EU. Although the exact date may change, Bloomberg sources suggest that the European Commission intends to levy the penalties in November 2024.
This year’s implementation of the European Union’s DMA is a major step in limiting the power of Big Tech, who are known as “gatekeepers.” According to the regulation, these companies must enable third-party payment methods on devices, allow customers to select their preferred web browser, and allow alternative app stores.
Apple’s Persistent Issues with EU Authorities
If Apple is judged to be at fault, the DMA might impose a fine of up to 10% of its worldwide sales, with even more severe penalties of up to 20% for repeated infractions.
The European Commission formally accused Apple of DMA infringement in June, claiming the company’s restrictive business practices that restricted customer choice and competition. This was when the enforcement process started. This move expands on earlier regulatory investigations in the EU, which included a €1.84 billion punishment in March for limiting competitors who stream music on its App Store.
Furthermore, Apple has a difficult relationship with EU authorities, which is especially clear from its previous conflicts with Margrethe Vestager, the EU Competition Commissioner, who has publicly criticized Apple for its business methods. One such instance was Vestager’s mandate that Apple pay back €13 billion in taxes owed to Ireland; Tim Cook, the CEO of Apple, brushed this off as “political.”
But Apple’s problems with regulations are not limited to Europe. The Department of Justice has filed an antitrust case against the iPhone manufacturer, alleging that the corporation has monopolized the market for high-end smartphones. Apple disputes these claims, claiming that it deals with “fierce competition” and that its actions don’t contravene antitrust rules.
Greater Effects and Big Tech Consequences
Apple’s regulatory obstacles coincide with the DMA’s push on other tech behemoths. For example, Facebook’s parent company, Meta, may soon be subject to fines for its “pay or consent” advertising strategy, which the EU identified as violating the DMA.
These cases highlight the EU’s larger efforts to encourage fair competition and hold large tech companies responsible. Apple just reported impressive fourth-quarter earnings, with revenue hitting $94.9 billion, marginally exceeding forecasts, despite these difficulties.
