EU fines Apple €500M ($570M) for violations of the Digital Markets Act

Apple has been battling the European Commission over the Digital Markets Act since practically the day it was first passed in 2022. The sweeping regulations, most of which went into effect in 2023, have resulted in major changes for Apple, from the wholesale adoption of USB-C charging instead of Lightning to a separate version of iOS for the European Union that is more open and flexible.

But the EU has been investigating Apple and other so-called “gatekeepers” over the past year to see if their changes are enough to be in compliance with the law. When Apple comments, it typically says the regulations are misguided or that it believes it is in compliance already, and agrees to “work with regulators.”

Now, the European Commission has issued its first major fines under the Digital Markets Act, slapping Apple with a €500M fine (that’s about $570M in U.S. dollars). Meta was also fined €200M.

The version of iOS users get on their iPhones in the EU is, some would say, superior to that which we have in the rest of the world. It allows alternate app stores and app side-loading (with restrictions), more user control over default apps, more open payment systems, and other changes. As recently as March, the EU pointed out several ways in which Apple was still out of compliance with the regulations, with specific steps needed to address in order to avoid a fine.

Apple has said it will challenge the fine. In a statement emailed to Reuters, the company said:

Today’s announcements are yet another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free.

Apple

About a year ago, Apple was fined €1.8M (about $2B then) over its past practices that were determined to favor Apple Music over Spotify and other rival streaming services—that was the result of a five-year investigation that predated the Digital Markets Act.

The Commission has informed Apple that its contract terms concerning alternative app distribution breach the DMA. Apple has an extensive list of requirements necessary to allow apps to be directly downloaded or for alternate app stores and charges a “Core Technology Fee” for those who choose to distribute and monetize their apps outside its ecosystem.

In a press release announcing the fines, the European Commission said:

Under the DMA, app developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.

The Commission found that Apple fails to comply with this obligation. ….

As part of today’s decision, the Commission has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect.

European Commission

Apple and Meta have 60 days to comply with the directives or face the potential for additional periodic fines.

The European Commission also ended its investigation into Apple’s “choice obligations,” following what it calls a “constructive dialogue with Apple.” This concerns making sure that users in the EU can easily uninstall any software applications, change default settings, and choose their default web browser on iOS. The Commission says that Apple’s changes in these areas are in compliance with the DMA.