The European Commission could sanction Apple for violation of Digital Markets Act, the regulation on digital markets for large platforms, and the penalty could be very severe: a billion a day.
The prospect of a sanction, which is not yet official nor has its proportions been decided, is mentioned by the Financial Times which in the past has demonstrated that it has excellent connections within the EU’s decision-making bodies.
The cause of the fine, as mentioned, failure to comply with the rules that the Union has established for those who hold a dominant position in specific digital sectors. For Apple, which had stated that it wanted to respect the rules: the distribution of applications connected to the smartphone ecosystem.
Based both on the facts and on the protests of some of Apple’s main accusers, after an investigation, the Union would have established that the rules that the company has given itself and defined as in line with the rules, are not sufficient to meet the obligations which should allow developers to direct users even outside the App Store without commissions, are not enough.
It is not clear what exactly the subject of the dispute is but it is likely that the Commission will point the finger at the Core Technology Fee: This is provided for iOS apps distributed by the App Store and/or an alternative app marketplace a payment of €0.50 for each first installation per year over the one million threshold.
The criticism suffered immediately after the launch of this request was ferocious. Many see Core Technology Fees as a way to prevent the emergence of a true alternative store market. And in fact today, many months after the launch of iOS 17.4 which theoretically opened the way to them, of stores other than the App Store there are very few of them and it seems that they are also very little populated and used.
Others will arrive but the difficulties, especially for those who distribute large quantities of applications in freemium mode, are completely evident. You run the risk of having high installation volumes but having to pay 50 euro cents for applications that yield little or nothing.
After criticism, Apple has prepared changes for app developerswith new options for app distribution and payment processing, changes to comply with the Digital Markets Act (DMA).
If Apple were found guilty of having created a penalizing and inadequate system, therefore, to respect the rules of the digital markets act, as mentioned, it could be one billion euros per day. This is 5% of its global daily turnover, a very heavy penalty, which would be in place until the rule as interpreted by the EU is respected.
The EU has previously fined Apple €1.8 billion for anti-competitive behavior in a market in which it does not hold a dominant position: that of music streaming, believing that it would not sufficiently promote cheaper alternatives. Apple last month announced an appeal, believing that there is no credible evidence demonstrating harm to consumers, “ignoring the reality of a thriving, competitive and fast-growing market.”
In reality, Apple is under accusation by regulatory bodies in several countries around the world. In the UK it may be forced, for example, to open alternative stores as it has done in Europe. The same thing will certainly happen in Japan, whose parliament has just approved rules very similar to those of the Digital Markets Act. Here too, Apple (but also Google) will have to allow alternative stores to be opened and have equanimity on the installation of browsers.
However, the largest and most important lawsuit will open in the USA where Apple will be called to answer for the illicit exercise of its monopoly before the Department of Justice.
