Apple Might Get Fined $38 Billion

Apple is the first company charged with violating the EU's Digital Markets Act.

The EU is charging Apple with violating the Digital Markets Act, a move that could cost the company $38 billion if found guilty. The action follows complaints that the company isn’t doing enough to satisfy the region’s DMA regulations.

The DMA’s rules, which came into effect for Apple in March, are intended to encourage fair competition and more open markets. The law was supposed to require Apple to allow steering—a developer practice for directing users to payment methods outside the App Store—as well as third-party app stores. Apple has technically complied with these requirements, but developers have called out the company for violating the spirit of the law.

Epic Games CEO Tim Sweeney has called Apple’s implementation of DMA policies “malicious compliance,” continuing a feud that began when a pre-DMA Apple pulled Fortnite from the App Store for steering users to Epic’s own payment methods. The developer called out the company’s “junk fees” for outside payments and third-party stores, and now it seems the EU agrees.

In a press release, the European Commission said it is formally charging Apple for violating its steering rules. The company currently only allows developers to link users to an outside website, which the EU says limits their ability to effectively market to or charge consumers. Further, it charges developers fees on digital purchases consumers make “within seven days after a link-out.”

EU Commissioner Margrethe Vestager, who leads Europe’s competition policy, said that “Our preliminary position is that Apple does not fully allow steering.” In addition to the anti-steering charge, Vestager said the Commission has also opened proceedings to investigate compliance for third-party app store rules, with a focus on the company’s Core Technology Fee and the difficult process users must follow to install third-party app stores.

“For too long Apple has been squeezing out innovative companies—denying consumers new opportunities & choices,” EU Commissioner for Internal Market Thierry Breton posted on X, formerly Twitter.

Apple is just the first company to enter the Commission's sights, as the DMA’s rules also apply to Alphabet (Google), Amazon, Meta, Microsoft, and ByteDance (TikTok). The Commission said it is also currently investigating Alphabet and Meta for non-compliance, as well as gathering “facts and information” on Amazon.

If Apple is found guilty of infringement, the EU could charge the company up to 10% of its annual global revenue, or around $38 billion based on last year’s earnings. The charge could jump to 20% for repeated offenses.

Apple did not immediately reply to Lifehacker’s request for comment, however Apple spokesperson Peter Ajemian told The Verge, “Throughout the past several months, Apple has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission…we will continue to listen and engage with the European Commission.”

Apple has already been fined by EU antitrust regulators this year, paying about $2 billion in March following an antitrust complaint levied by Spotify in 2020.