Apple may 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 penalise Apple over its App Store policies. Sources suggest the decision, expected this month, could see Apple facing a fine of up to 10% of its annual global revenue — a sum that could reach as high as US$38bn if Apple is found to be a repeat offender.
The DMA, which took effect in May 2023, was introduced as a comprehensive regulatory framework aimed at curbing anticompetitive behaviour among the world’s largest tech companies, including Apple, Google, Amazon and Meta. The Act designates these companies as “gatekeepers” and requires them to comply with a set of rules designed to create a fairer digital marketplace. Under the DMA, these companies are prohibited from using certain restrictive practices that could stifle competition, such as favouring their own products or services and limiting the ability of developers to interact directly with users outside of controlled platforms.
The European Commission’s investigation into Apple was prompted by complaints from streaming giant Spotify, which argued that Apple’s policies prevented developers from offering more affordable subscriptions outside of the App Store, where Apple takes a 30% commission on purchases. In March 2024, Apple faced a €1.84bn ($2bn USD) penalty 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 commissions and relaxing restrictions around alternative app distribution. However, these efforts have not fully appeased regulators.
If Apple does not comply with DMA requirements, the Commission could also issue daily fines of up to 5% of Apple’s average daily revenue until compliance is achieved.
EU Commissioner Margrethe Vestager, known for her aggressive stance on Big Tech regulation, may conclude her tenure with this landmark action as a statement on digital market fairness.
Representatives for Apple and the European Commission have declined to comment.
