Apple will appeal the European Union’s (EU) massive fine, with the White House chiming in to underscore that it won’t tolerate “extortion” of American companies.
The European Commission announced yesterday it will fine Apple half a billion euros for breaching the European Union’s Digital Markets Act (DMA) in the first-ever non-compliance decision adopted under the bloc’s DMA legislation.
In a statement to Reuters, the Cupertino tech giant said the ruling should be filed as “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 to appeal EU fine
Apple is on thin ice here. Its anti-competitive conduct with developers and the App Store reeks of a greedy corporation. The argument that the Commission’s decision forces Apple to “give away our technology for free” is silly. What technology? How exactly does allowing developers to sell subscriptions outside the App Store (where Apple collects a 15-30 percent cut) amount to giving its technology for free?
The White House put out a statement calling fines levied against Apple and Meta a form of “economic extortion,” adding it won’t tolerate Brussels bureaucrats fining American technology giants. “This novel form of economic extortion will not be tolerated by the United States,” a White House spokesperson said. The full statement from the White House even called the Commission’s ruling a “regulatory death spiral.”
The European Union has fined Meta and Apple–two major American tech companies–hundreds of millions of euros under their discriminatory Digital Markets Act. This novel form of economic extortion will not be tolerated by the United States. Extraterritorial regulations that specifically target and undermine American companies, stifle innovation, and enable censorship will be recognized as barriers to trade and a direct threat to free civil society. The EU’s malicious targeting of American companies and consumers must stop. End the EU’s regulatory death spiral!
Apple slammed the European Commission:
We have spent hundreds of thousands of engineering hours and made dozens of changes to comply with this law, none of which our users have asked for. Despite countless meetings, the Commission continues to move the goal posts every step of the way. We will appeal and continue engaging with the Commission in service of our European customers.
In my take, Apple should be happy that it was fined only half a billion euros, which works out to approximately $570 million, and not more. Half a billion euros is a symbolic fine for a company of Apple’s size. Of course, Apple can and should appeal this decision, but challenging it in court will be easier said than done.
What’s Apple’s offense?
The Commission found Apple’s anti-steering rules that bar developers from telling users about more affordable subscriptions on the web to be anti-competitive.
It also took issue with the way Apple is effectively preventing the distribution of iOS apps through competing app marketplaces with a cumbersome process that requires EU iPhone owners to click through many so-called scare screens.
The ruling orders 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.”
Apple must comply with the decision within 60 days or risk “periodic penalty payments” that could reach up to ten percent of its global annual revenue. Apple’s annual revenue for fiscal year 2024 was approximately $391.04 billion, and ten percent of this amount yields nearly $40 billion.