Accused of violating European law, Apple may have to pay up to $38 billion in fines

This fine is equivalent to 10% of Apple’s 2023 revenue globally.

Last month, the EU’s Digital Markets Act (DMA) came into effect, aiming to control the behavior of large technology companies andonline marketplaces. This has led to conflicts between the EU and many of the companies that this law covers, including Apple.

Now, EU regulators have said that Apple is not complying with the new rules of the law. They argue that Apple is still preventingà Develop on the App Store instructs users in other ways to download their apps.

It was part of a series of criticisms the EU made when it published the preliminary findings of an investigation.

Thierry Breton, the European Union’s commissioner for domestic markets, said that “for a long time, Apple has eliminated innovative companies, denying new opportunities and choices for consumers.” He joked that “‘Act Differently’ should be their new slogan,” a reference to Apple’s old “Think Differently” ad campaign.

Apple now has a chance to respond to these findings, which the committee will review. The EU Commission will make a final decision on Apple’s compliance in March 2025. If found to be in violation of the bloc’s regulations, the company could face a hefty fine of up to 10% of its global revenue – equivalent to equivalent to $38 billion based on the 2023 financial statements – or daily fines.

We are concerned that Apple’s new business model makes it difficult for app developers to operate as alternative and accessible markets n their end users on iOS,” Margrethe Vestager, Europe’s competition commissioner, said on social media.

The commission also continued to put pressure on Apple, while opening a new investigation into the company’s DMA compliance. look at the new contract terms that Apple has put in place for app developers.

Regulators are focusing on the 50-cent euro ($0.42) “core technology fee” that Apple currently charges developers for each of its apps.is downloaded and installed from outside Apple’s App Store.

DMA’s terms pave the way for alternative app stores to provide consumers with more choices. Competitors has criticized this fee, saying that it will discourage many of the existing free apps, which do not have to pay any fees Let’s move on to another platform.

Apple said that over the past few months, it has “made a number of changes to DMA compliance in response to feedback from developers and the European Commission.” u”.

“We are confident that our plan is compliant with the law, and estimate that more than 99% of developers will pay the same or less.for Apple under the new terms of business that we have created,” the company said in a statement.

“All business developers in the EU on the App Store have the opportunity to use the capabilities that we have introduced, including the ability to redirect app users to the web to complete a purchase at a very competitive price.” The company said it would “continue to listen and engage” with the committee.

The EU announcement comes shortly after Apple said three key new features were announced at the WWDC 2024 Developer Conference two weeks agowill not reach European users immediately. Apple says it is concerned that these tools — which allow users to control iPhones with Macs, share other iPad screens, and Apple Intelligence AI tools- will not be compatible with European regulations.

“Specifically, we are concerned that the interoperability requirements of the DMA may force us to compromise integrity of the product in a manner that may pose a risk to the privacy and security of the user’s data, ” Apple said in a statement. ” We are committed to working with the European Commission in an effort to find a solution that will allow us to offer these features to our customers. without compromising their safety.”