Penalties Coming to Apple from the European Union
The European Union (EU) began to more strictly monitor the practices of large technology companies with the Digital Markets Act (DMA), which came into force in 2022 to regulate competition rules in the digital market. Within the scope of this law, Apple’s applications on the App Store were examined on the grounds that they were anti-competitive.
In the investigation initiated as a result of an official complaint filed by Spotify last March, Apple’s practices that prevented users from directing users to alternative application stores were detected. Such practices are considered anti-competitive within the framework of the law, and therefore a large penalty is expected for Apple.
What will be the amount of the penalty?
The EU Commission described Apple’s practices as “anti-directive” and decided that the company was hindering competition. Apple was previously fined 1.84 billion Euros (about 2 billion dollars) in March for violating this law. However, the exact amount of the new penalty has not yet been announced.
According to the Digital Markets Act, companies can be fined up to 10% of their annual global revenue. If violations continue, this rate can rise up to 20%. Considering Apple’s revenues in 2022, it is estimated that the new penalty could reach up to approximately $38 billion.
Other Apple Violations
Apple is under scrutiny not only for its App Store apps, but also for allegations that it blocks the operations of alternative app stores in Europe. This situation limits users’ access to alternative applications with more variety and competitive prices. Investigations show that Apple is trying to maintain its dominance in the market by restricting such applications.
EU’s Tax Requests
Additionally, in September, the EU won a lawsuit to collect 13 billion euros (about $14.4 billion) in taxes that Apple had not paid. This means that Apple does not fulfill its financial obligations in Europe, and it is conceivable that the company may face serious sanctions in this regard.
Conclusion
Apple has come under great pressure as the European Union’s controls on digital markets increase. The fact that the company both violates competition laws and fails to fulfill its tax obligations means that it may face more penalties and sanctions in the future. These developments in Europe are considered as an indicator that technology giants may have to change the way they do business.
- The new penalty expected to be imposed on Apple is approximately 38 billion dollars.
- The company is under scrutiny for its practices that block alternative app stores.
- The EU has won the tax case for 13 billion Euros that Apple did not pay.
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