The European Commission has informed Apple that its App Store policy potentially violates the Digital Markets Act (DMA), particularly by restricting app developers from directing consumers to alternative purchasing or content channels.
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This marks the second potential fine imposed by the European Commission that Apple has faced this year. The first, imposed in early March, accused the company of abusing its dominant market position in the distribution of music streaming apps to iPhone and iPad users. The fine amounted to 1.8 billion euros, the highest penalty Apple has faced from the EC.
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The previous fine was a 1.1 billion euro penalty in France in 2020 for alleged anti-competitive behavior, which was reduced to 372 million euros upon appeal.
This time, the potential fine could be up to 10% of the company's total global revenue. Based on the 2023 financial results, this could mean a penalty of 35 billion euros. However, such a large sum is unlikely. It is more plausible that the final amount will not exceed the last penalty, and may even be in the hundreds of millions of euros. Apple will also have the opportunity to appeal the decision, which could potentially lead to a reduced amount.
This preliminary assessment is part of a broader scrutiny under which Apple's new contractual stipulations for third-party developers, including a 'Core Technology Fee', are also being examined for compliance with the DMA. Margrethe Vestager, the executive vice-president in charge of competition policy, emphasized the importance of "steering" to reduce developer dependence on major app stores and to alert consumers to better offers.
Apple (D1)
In pre-market trading, Apple's shares are up 0.20%. Consequently, there is no reaction to the potential fine. Currently, there are no exact details regarding the amount or potential timeline for resolving the investigation and paying the fee. Apple's shares still remain at record high levels above 210 USD.
Source: xStation 5
