Apple could soon be facing another huge fine from the EU

Apple is no stranger to legal battles, especially in the European Union.

Earlier this year, the tech giant was hit with a €1.84 billion ($2 billion) fine by the European Commission after an investigation found that Apple had unfairly restricted Spotify and other music streaming services on its App Store by indirectly making their services more expensive.

But that wasn’t the end of Apple’s legal troubles in the EU. In September, the company was ordered to pay €13 billion ($14.4 billion) in back taxes to Ireland. Now, just months later, Apple is on the brink of facing yet another major fine—this time under the Digital Markets Act (DMA).

The DMA is a set of regulations designed to curb the dominance of Big Tech firms like Apple. It was enacted in November 2022 but came into full effect in May 2023 and targets anti-competitive practices by large tech companies.

Apple's anti-steering practices, which prevent developers from directing users to cheaper deals outside the App Store, are at the heart of the issue because they create a closed-loop ecosystem that limits competition.

According to Reuters, the European Commission is preparing to fine Apple for these violations, possibly before Margrethe Vestager, the EU's competition chief, leaves office, which means it might be as soon as later this month.

While the exact fine amount is still uncertain, it could reach up to 10% of Apple’s global annual revenue, which could be about $38 billion based on earnings from last year, per The Verge. The fine could also increase if Apple doesn’t comply.

Despite recent changes, such as removing many of its anti-steering restrictions, Apple Insider reports that EU regulators remain sceptical. They argue that Apple may be following the letter of the law but not the spirit of the regulations.

The DMA targets large digital platforms that provide core platform services, such as online search engines, app stores, and messenger services so it won't be surprising is companies like Google with its dominating Google Search get caught up in these legalities.

As the EU ramps up its efforts to rein in monopolistic behaviour, these regulatory moves may open up more opportunities for smaller players in the tech industry, giving them a better shot at competing on a more level playing field.