Apple has been forced to make a number of changes to the way people use iPhones in the European Union following the arrival of the Digital Markets Act (DMA) in March 2024. But it appears that wasn't enough. Apple, the first of the Big Tech companies to be dragged into proceedings by the EU, is facing charges for supposedly stifling competition on its App Store.
The EU has determined that Apple isn’t playing fair. According to the Financial Times, those in the know say the iPhone giant is under fire for not allowing app developers to “steer” users to external offers without slapping them with fees. This fresh challenge is the first time a Big Tech company would be charged under the new DMA law.
What exactly is going on?
The European Commission started sniffing around Apple back in March. Alphabet and Meta were also put under the magnifying glass, so it isn't just Apple under pressure (although you could argue Apple has been affected the most). Insiders suggest that Apple could still make some strategic manoeuvres to dodge these charges, but don’t hold your breath.
Now, if Apple does find itself on the wrong side of the DMA, the penalties are nothing to be ignored. We’re talking daily fines up to 5% of its global turnover – a figure that could reach a staggering $1 billion per day. Ouch. This move is part of a broader crackdown on Big Tech’s market dominance, with the US also getting in on the action with its antitrust case against Apple.
In an attempt to placate the Brussels bureaucrats, Apple rolled out significant changes to its iOS, App Store, and Safari in January. The brand now allows users to use third-party app stores and download apps from other sources. Apple even trimmed App Store fees from 30% to 17% in some cases.
But the EU isn’t entirely convinced. They’re also eyeing Apple’s newly minted charges, including a “core technology fee” and an additional 3% for developers using its payment processor. Some developers are saying that these new fees could actually cost them more, making you wonder if the EU is chasing its tail here.
