Apple could be fined a billion dollars a day

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In March, the European Union introduced novel rules to stop companies like Apple and Google from blocking third-party companies from running their own in-app item stores. This was supposed to pave the way for games like Fortnite to go back to mobile, they could now make in-game purchases without having to apply Apple’s or Google’s own stores, thus recouping 30 percent of each purchase. However, it may happen that the EU decides that Apple is still not playing fair and may start imposing its actions huge penalties.

The theory was that the EU’s Digital Markets Act (DMA) would allow apps and games to run their own, independent payment systems for in-app purchases. Everything previously introduced to iOS required all payments to go through Apple’s own systems, and in this case the company received a 30 percent cut every time. Companies like Epic he argued very loudly that such a system is deeply unfair, and while it’s strenuous to choose between a greedy corps taking money from apps and apps taking money from their customers, Epic was right that it is anti-competitive. The EU agreed, announcing the DMA in 2023 and implementing it this year.

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However, cheeky Apple immediately created its own loopholes by technically allowing apps to run their own stores, but only if they paid the so-called basic technology fee in the amount of €0.50 for installing the application. The fee only applied to companies that had achieved over one million installs in the previous 12 months, but was obviously intended to ensure that the company continued to receive its tithe. At first glance, this is not in line with the spirit of the novel regulations.

(It’s also worth noting that apps that have had unexpected success can be hit particularly strenuous by this and suddenly discover fees of €1 for every two installs of their viral product, plus an additional three percent fee for using iOS payment processing software, and get very quickly in a whole lot of trouble.)

As you might expect, Tim Sweeney was not impressed. In January 2024, he described it as a “devious new case of malicious compliance.”

The EU seems to agree with this to some extent. According to report in Financial Times.The newspaper’s sources say the European Commission believes Apple is “not in compliance” with the novel law and will therefore soon start imposing fines – the first under the DMA.

And these fines don’t come budget-friendly. In the event of an official announcement that Apple is violating the DMA, the maximum fee is five percent of average daily turnover. Which in Apple’s case is a terrifying $1 billion.

Don’t try to imagine Apple making over $20 billion a day – human brains are not wired to deal with such monstrous capitalism – just know that it’s enough to hurt the company and anger shareholders. Meanwhile, the same EU group is examining whether Meta (Facebook) and Alphabet (Google) could also be regulated. The FT He also notes that Apple would still have time to change its novel system to avoid penalties.

Apple said FT that the company “is confident that our plan is compliant with the DMA” and that it “will continue to cooperate constructively with the European Commission during its investigations.”

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