Why Apple is facing mammoth $38 billion fine in Europe
Apple is going to be the first company to be penalized under the European Union's Digital Markets Act (DMA), Bloomberg reported. The upcoming fine stems from the tech giant's "anti-steering" practices, which the Commission has found to be harmful to competition on the App Store. The fresh penalty comes just months after the EU slapped Apple with a €1.84 billion ($2 billion) fine in March this year.
EU Commission's ruling on Apple's restrictive practices
The EU Commission's ruling stems from a complaint filed by Spotify, which accused Apple of restricting developers' ability to steer users toward cheaper purchases outside the App Store. This practice was declared illegal under the DMA in March. While the exact amount of the impending fine is still unknown, DMA rules permit penalties up to 10% of a company's annual global revenue and up to 20% for repeat offenses.
Potential implications on Apple's revenue
Going by Apple's last year's revenue, the first fine could go as high as $38 billion. The Commission is likely to announce this penalty later this month, ahead of competition head Margrethe Vestager's exit from her position. Apple is also being investigated by the EU for possibly undermining alternative app stores. This comes after the EU scored a legal victory in September, successfully enforcing a €13 billion ($14.4 billion) payment from Apple for unpaid taxes.
