In March, the European Union introduced new rules to prevent companies like Apple and Google from blocking third-party companies from running their own in-app item stores. The goal was to allow games like Fortnite to make in-game purchases without using Apple or Google’s stores and losing 30 percent of each purchase. However, it seems that the EU believes Apple is still not playing by the rules and could face significant fines.
The EU’s Digital Markets Act (DMA) was intended to enable apps and games to operate their own independent payment systems for in-app purchases. Previously, all payments on iOS had to go through Apple’s systems, with the company taking a 30 percent cut. Epic and others argued that this was unfair and anti-competitive, leading to the introduction of the DMA in 2023.
Apple found a way around the new rules by allowing apps to run their own stores if they paid a Core Technology Fee of €0.50 per install for companies with over a million installs in the past 12 months. This fee, along with additional charges for using Apple’s payment processing software, did not align with the spirit of the DMA.
Tim Sweeney criticized Apple’s actions, calling it “a devious new instance of Malicious Compliance.” The Financial Times reported that the European Commission believes Apple is not complying with the new law and is considering imposing fines under the DMA. If Apple is found to be in violation, the maximum fine could be up to five percent of its average daily turnover, which amounts to a staggering $1 billion.
The possibility of such fines could impact Apple and upset shareholders. The EU is also investigating Meta (Facebook) and Alphabet (Google) for potential violations of the rules. Apple stated that it believes its plan complies with the DMA and is willing to work with the European Commission during their investigations.
It remains to be seen how this situation will unfold and whether Apple will make changes to avoid fines. The implications of these actions could have far-reaching consequences for the tech industry and highlight the ongoing challenges of regulating big tech companies in a rapidly evolving digital landscape.