Apple to face first-ever EU fine under DMA, Bloomberg reports

According to Bloomberg, Apple is on the brink of receiving its first penalty under the European Union’s Digital Markets Act (DMA), marking a significant moment in the EU’s crackdown on Big Tech monopolistic practices. This fine is expected to address Apple’s restrictive App Store policies, which have long drawn criticism for limiting competition and stifling innovation, particularly in how developers are permitted to connect with users.

The forthcoming penalty targets Apple’s refusal to allow developers to redirect users to external platforms for better offers or lower prices—a practice the EU considers anticompetitive. According to sources close to the matter, the European Commission is finalizing the penalty decision, which may also include ongoing daily fines if Apple fails to comply with the DMA’s rules. While the decision could be issued before Margrethe Vestager, the EU’s outgoing competition commissioner, leaves office later this month, it’s possible the ruling could be delayed until later this year, reports Bloomberg.

This isn’t Apple’s first clash with EU regulators. Earlier this year, Apple was handed a €1.8 billion fine ($2 billion) for practices deemed anticompetitive by the European Commission in a case involving music streaming service Spotify. That penalty was part of ongoing issues between Apple and EU regulators, who are keen on opening markets to fair competition.

Under the DMA, the EU has empowered regulators to issue fines of up to 10% of a company’s global annual revenue for initial offenses, increasing to 20% for repeated violations. Additionally, periodic fines of up to 5% of Apple’s average daily revenue could be imposed if the company continues to restrict competition through its App Store policies. This tough stance is a major escalation from traditional antitrust measures, as the DMA is intended to preempt monopolistic behavior before it distorts markets.

Apple’s revenue continues to be robust, with the company recently reporting fourth-quarter earnings of $94.9 billion, narrowly surpassing analysts’ expectations. Despite this, the company’s App Store practices have come under increasing scrutiny. In past disputes, Vestager has criticized Apple for actions like blocking Spotify from informing users of alternative subscription options outside the App Store.

Notably, Vestager has previously clashed with Apple on other fronts, including an order requiring Apple to repay €13 billion in back taxes to Ireland, a case that Apple CEO Tim Cook publicly condemned. The EU also recently succeeded in pressuring Apple to open the iPhone’s payment chip to third-party financial service providers, challenging the monopoly of Apple Pay.

As Apple braces for this imminent fine under the DMA, it faces mounting pressure from EU regulators to adapt its policies to align with Europe’s stringent competition laws. This case is a test of the EU’s resolve to enforce the DMA and curb Big Tech’s dominance in the digital marketplace.