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Apple could face billions in fines under European Union law


FILE - This illustration photo shows the Apple App Store logo reflected from an iPhone onto the back of an iMac in Los Angeles, Aug. 26, 2021.
FILE - This illustration photo shows the Apple App Store logo reflected from an iPhone onto the back of an iMac in Los Angeles, Aug. 26, 2021.

Billions of dollars in fines could be imposed on Apple following an accusation of noncompliance from the European Commission on Monday.

Apple is accused of breaking the European Union’s Digital Marketing Act (DMA) rules on digital competition via its app store by inhibiting app makers from promoting cheaper alternatives. The European Commission claimed in a preliminary review that the app store “prevent[s] app developers from freely steering consumers to alternative channels for offers and content."

The commission cited a “core technology fee” on the App Store as cause for a potential DMA violation. The fee charges 54 cents to app developers every time their app is downloaded from somewhere outside the Apple-owned digital marketplace. There is concern that the fee will dissuade developers from using other apps.

To expand competition in the EU’s 27 nations the DMA requires some of the biggest tech companies in the world, also referred to as “gatekeepers,” to expand competition. Apple is the first tech firm to be formally accused by the commission under the law, which went into effect on March 7.

The commission also opened probes against Google and Meta in March.

The DMA would allow the commission to impose daily penalties of up to 5% of Apple's global revenues. The commission could also enforce fines of up to 10% of the tech company’s overall worldwide turnover.

For repeat offenders, the 10% fine could increase to as much as 20%. In extreme cases of violation, the commission has the authority to break up companies.

Apple claims to have made changes to comply with feedback from the European Commission and said it would continue.

Due to the probe, the commission announced the closing of an antitrust case opened against Apple in 2020 into whether the tech firm violated Brussels' antitrust rules. The commission said it shut down that case “to avoid multiple investigations into the very same conduct.”

The commission will have a decision on Apple’s compliance by March of 2025. The outcome of the probe could change how the App Store functions within the EU.

Some information for this report came from The Associated Press and Agence France-Presse.

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