Apple have been accused by EU regulators of noncompliance with new rules designed to increase digital competition.
If they are found guilty of breaching the new rules, they face fines of 10% or more of their entire global revenue, potentially totaling into the tens of billions of dollars.
Pressure from EU Regulators
Apple have been feeling the heat from EU regulators in recent times, facing a large fine as recently as this year.
In March, they were fined €1.8 billion for a breach in competition laws. The company had placed restrictions in their software to block information about rival music streaming services.
Apple AI Strop
In response to EU regulator pressure, Apple announced last Friday that they would delay the rollout of AI-enabled features on iPhones.
They claimed that this decision was made due to the uncertainty around the new EU regulations.
App Store Revamp
New EU anti-competition laws have already had an effect, with Apple having made changes in January to several of their services.
This included a reduction of app store fees and the removal of the restrictions on installing third-party app stores on iPhones and iPads for the first time.
Apple Bullishness On Compliance
Apple have expressed a lack of anxiety in response to the latest regulator statements, saying, “We are confident our plan complies with the law.”
They said they’d “made a number of changes to comply with the DMA in response to feedback from developers and the European Commission.”
Blocking Information About Competition?
One of the regulator’s central contentions is that Apple are blocking consumers from information about potentially cheaper, better alternative services.
Apple are being investigated for not allowing businesses to advertise alternative options for users outside the Apple ecosystem. This would be a breach of the EU’s new Digital Marketing Act.
What is the Digital Marketing Act?
The Digital Marketing Act (DMA) is a 2022 set of regulations designed to increase competition in the historically low-competition area of “Big Tech”.
It targets a set of large tech companies including Apple, Amazon and Microsoft by defining them as “gatekeepers”. Regulations include rules designed to limit the amount of “self-promotion” allowed on “core services” such as Google search and app stores.
Potential Landmark Ruling
The ruling would be a significant first use of the DMA, which was brought in two years ago and hasn’t yet been enforced in this way.
Due to the complex nature of the sector, it has taken some time for regulators to understand and develop evidence against the targeted ‘gatekeepers’.
Regulators Say Apple Should “Act Different”
EU regulators have explicitly suggested that Apple should change their ways. “Apple’s new slogan should be ‘act different’,” according to the EU internal market commissioner, Thierry Breton.
They should also see compliance with the regulations as a “badge of honor,” according to Margrethe Vestager, the EU executive vice president in charge of digital policy.
Massive Fines Could Have Huge Impact on the Company
The potential fines are dramatic, and would cause issue at any company, no matter their yearly revenue.
They amount to 10% of all global annual revenue, rising to 20% for repeat offenses. For Apple, this would be in the region of tens of billions of euros.
