Tech giant Apple may be facing another round of legal issues in Europe after an EU commissioner referred to “very serious” issues with non-compliance in the company.
EU Not Happy With Apple
Officials of the European Union are still unhappy with Apple’s business practices, following two years of legal conflict between the continental bloc and one of the world’s largest tech companies.
Vestager Speaks Out
Margrethe Vestager, the European Union Commissioner for Competition, spoke to CNBC on Tuesday, saying: “We have a number of Apple issues, I find them very serious.”
Large Tech Probe
Her statements come in the wake of a large-scale probe of tech giants like Apple, Meta, and Alphabet that began back in March. It was the first sweeping investigation under the EU’s new Digital Markets Act (DMA) which was implemented last year.
Purpose of the DMA
The DMA was implemented to stop digital marketplaces from shouldering out competition and being used as a platform to promote its parent company – with Apple and the App Store being prime examples.
The Six Gatekeepers
In particular, the EU is concerned with the world’s largest tech companies – specifically Apple, Alphabet Inc (Google), Microsoft, Amazon, Meta, and BYteDance (TikTok) – which it refers to as the six “gatekeepers” of digital marketplaces.
A Lot of Business Happens Through Apple
″[Apple] are very important because a lot of good business happens through the App Store, happens through payment mechanisms, “ Vestager explained.
A Surprise for the Commissioner
“I was very surprised that we would have such suspicions of Apple being non-compliant,” she told CNBC’s Silvia Amaro, explaining that she did not expect this of “such a company.”
Original Focus
When the EU first announced its Apple investigation, it was focused on a “core technology fee” that Apple charges businesses to gain access to the App Store.
Has the Focus Changed?
It also planned to investigate concerns that Apple was stopping businesses from directing users to more affordable app stores. It is unclear if the investigations extend beyond this purview.
Potential Charges
Now, reports suggest that the European Commission is preparing to press charges against Apple for significant compliance violations.
Brussels Pressing Charges
Last week the Financial Times reported that Brussels is already planning to charge the company due to findings from the DMA investigations. This was apparently confirmed by three unnamed sources close to the investigation.
Just Like Any Other Business
While Vestager did not confirm whether charges would be brought against the company, she said that the probe should be concluded “soon.” If Apple is found guilty of alleged violations the commission would enforce penalties “with the same dedication and with the same top priority as with any other business.”
First Target for DMA Violations
If Apple is charged it will mark the first time that EU regulators will pursue penalties against a Big Tech corporation for DMA violations.
$5 of Daily Turnover
Potential fines could be as much as 5% of the company’s daily global turnover, equivalent to $1 billion per day according to the Financial Times.
Fines for Repeat Infringement
If the company continues to exhibit non-compliance with DMA regulations it can be fined as much as 20% of its daily turnover for repeat infringements.
Apple Could Lose Billions
While it is still unclear whether Apple will be charged by the EU under the DMA, it is clear that these fines would have a significant impact on the tech giant.
Possible to Prevent
Apple could take action to avoid fines and charges for these violations by provably changing their business practices. So far the company has not responded to the FT report or Vestager’s comments.
Response in March
The company did respond to the probe announcement back in March, saying “We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations.”
A Contentious Relationship
It is just the latest legal issue between Apple and the EU’s executive arm. Back in 2022, the EU established a new rule requiring the tech company to make the newest iPhones compatible with USB-C chargers.
Alternative Marketplaces Allowed
Earlier this year the EU also cornered the company into allowing alternative third-party marketplaces to be used on the latest iPhone update iOS 17.4, which now applies to users in 27 countries.
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The post Apple in Hot Water: “Very Serious” Issues for Digital Business Laws first appeared on Liberty & Wealth.
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