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Apple on track to fall foul of DMA legislation with a potential penalty of $50M per day

Leaks suggest that Apple has failed to comply with the EU’s Digital Markets Act, costing the firm 5% of its daily global revenue
Apple on track to fall foul of DMA legislation with a potential penalty of $50M per day
  • Apple may be the first big tech group charged by the DMA
  • The EU's commission has been investigating Apple's potential noncompliance since March
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Apple looks set to be the first big tech group that will face charges under the EU’s Digital Markets Act, with up to $50 million in daily penalties expected.

The EU’s commission began investigating Apple in March and now Brussels is believed to be ready to bring a charge against the tech giant, after alleging that Apple stifles competition on its App Store and that Apple pays only lipservice to the rulings.

According to three people familiar with the matter - who spoke with the Financial Times - The European Commission has decided Apple isn’t adhering to its legal obligation to allow developers to "steer" users away from the App Store without imposing fees.

Apple’s disregard of its obligations may well result in the first use of the DMA's power against a tech giant, as two of those with knowledge of the case believe charges will be announced "in the coming weeks".

Open investigations

Apparently, EU regulators currently only have "preliminary findings" and Apple still has time to correct its activity, in which case a final decision on any punitive measures could be reassessed.

Of course, it is also possible the EU regulators will charge another tech giant first - investigations are also open into Meta, as well as Google owner Alphabet, after all - but from the information currently available, Apple does look to be the first platform holder whose industry authority will be tackled by the DMA.

And if found guilty, Apple could be charged 5% of its average $1 billion in daily global turnover. This would equate to $50 million per day in penalties.

Though Apple is no stranger to legal battles, such as the years-long case brought by Epic Games over Apple’s App Store. Epic Games’ desired changes weren’t enforced in the US, much to the Fortnite creator’s chagrin, but there have since been new rules implemented in the EU - like the DMA.

As a result, Apple can no longer charge companies a 30% fee for using the App Store in the EU, instead only able to charge up to 17% but their new technology fee soon bump this up to levels akin to those before the DMA stepped in. And - up until now, at least - it had seemed as though Apple had successfully dodged the issue.

Whether another legal case is indeed on the horizon as the EU commission finally wades in and Apple fights back, for now we can only wait and see...