Sunday, July 21, 2024

EU is reportedly going to fine Apple over failure to comply with the Digital Markets Act

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Reports say that the European Union is about to issue Apple with the first-ever fine of a company under its Digital Markets Act, and specifically over anti-steering measures in the App Store.

The EU has already fined Apple $2 billion over its alleged blocking of rivals to Apple Music from promoting their potentially cheaper alternatives. Subsequently, it was reported that the European Union was assessing whether Apple has now complied with the ruling.

According to the Financial Times, the EU has concluded that Apple has not, or at least that it hasn’t complied sufficiently. Three unspecified sources said to have close knowledge of the investigation, say that the EU is about to issue a new fine against Apple.

The investigation was conducted specifically under the powers granted by the Digital Markets Act. This would mean that Apple is the first company to be fined under that law — although reportedly both Meta and Google are still under investigation.

Allegedly, the conclusion that Apple has not complied with its obligations, is provisional. The EU is said to believe that Apple has failed to allow developers to promote their alternative offerings, and without imposing fees.

Apple will be able to take action to correct its practices, and the EU officials could then reconsider their decision before imposing a fine. The sources also say that the announcement of the fine could take place in the next few weeks, but the schedule is not set yet.

Should the EU choose to charge Apple over breaking the Digital Markets Act, the fine could be substantial. The law allows for daily penalties of up to 5% of its average daily worldwide turnover.

At present, that would mean a potential fine of up to $1 billion per day.

Craig Federighi speaking against third-party app stores at Web Summit in 2021 (Credit: Web Summit)

Apple has not commented on the report and isn’t expected to until, or unless, the EU announces the charge. However, the company previously issued a statement to AppleInsider regarding its compliance with the law.

“We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations,” said Apple. “Teams across Apple have created a wide range of new developer capabilities, features, and tools to comply with the regulation.”

“At the same time, we’ve introduced protections to help reduce new risks to the privacy, quality, and security of our EU users’ experience,” continued the company. “Throughout, we’ve demonstrated flexibility and responsiveness to the European Commission and developers, listening and incorporating their feedback.”

Also throughout the process of working to comply with the Digital Markets Act, Apple has stressed that being forced to allow alternative app stores is a security risk. Apple’s software engineering chief, Craig Federighi, even described sideloading apps outside of the App Store as being “a gold rush for the malware industry.”

The Digital Markets Act is the EU’s attempt to control against abuses of market dominance by Big Tech firms. It is the first such act to be passed into law, but other countries are attempting to mimic it.

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