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Apple Faces Potential $1 Billion Fine from EU Over Digital Markets Act Compliance

By  |  June 17, 2024

The European Union (EU) is gearing up to levy a substantial fine on Apple for its alleged failure to fully comply with the Digital Markets Act (DMA), as reported by the Financial Times. This action, expected to be announced in the coming weeks, would mark the first time a company has been fined under the DMA.

Apple had announced its compliance plans for the DMA in January and subsequently implemented them with the release of iOS 17.4 in March. These updates included a notable reduction in App Store commissions among other changes. Despite these efforts, the EU remains unconvinced that Apple has met all its obligations.

Key issues cited by the European Commission include Apple’s resistance to allowing app developers to “steer” users to external offers without imposing fees. This requirement is a critical component of the DMA, designed to enhance competition and reduce gatekeeping by large tech companies.

Related: Apple’s App Store, Meta’s AI Assistant Face Challenges in Europe

If the Commission proceeds with the fine, it could amount to 5% of Apple’s average daily global revenue, translating to over $1 billion. The report, based on information from three individuals familiar with the situation, notes that these are preliminary findings and that Apple could still implement further changes to avoid the penalty.

Apple has repeatedly stated its belief that it is in compliance with the DMA. A company spokesperson reiterated, “We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations.”

Since January, Apple has made several modifications to its initial DMA compliance strategy. These include revising app marketplace requirements, adjusting the Core Technology Fee structure, and adding Web Distribution capabilities. Despite these adjustments, the European Commission remains firm that Apple’s efforts have not sufficiently addressed all regulatory expectations.