• Apple to be fined under EU’s Digital Markets Act.
• Developers still not allowed to offer alternative payment routes.
• Competition commissioner leaves office with a bang, not a whimper.

Apple will soon be facing a large fine imposed under the EU’s Digital Markets Act, according to Bloomberg [account-walled]. Under the DMA, companies can be fined up to 10% of their global annual revenue for infractions, which in Apple’s case comprise its prevention of app developers offering users purchasing options outside Apple’s App Store.

At present, all payments made by app users have to be made via Apple, which – in all but a very few cases – takes 30% of the payment. The EU terms the practice ‘anti-steering’: preventing an app ‘steering’ users to an alternative destination online where they can make a payment not subject to Apple’s cut.

Apple fined after Spotify ruling

The proactive move by the EU in imposing a fine (the amount to be levied has yet to be announced) follows a fine imposed on Apple by the EU earlier this year after complaints from Spotify that centred around the same issue. The core of Spotify’s case was that subscribers to its music streaming platform via its iOS app had no other choice than to pay their subscription via the Apple App Store, thus lowering the Swedish company’s revenues by the 30% ‘Apple tax.’

The latest fine comes not as a result of any specific complaint against Apple, but because the company has continued its monopolistic payment policies, raising the ire of Margrethe Vestager, the European Union’s redoubtable competition commissioner. Vestager, whose formal term in office came to an end in September, has by all accounts been a tireless worker at the Commission, and been called “an iron fist in a velvet glove,” by French lawyer Stéphanie Yon-Courtin, and a “tax lady” by the ever-sagacious Donald Trump.

Apple has been having a hard time operating in the EU of late. In addition to the fine deriving from the Spotify complaint, Cupertino has been landed with a back-dated tax bill to be paid to the Irish government of €13bn, an affair termed “total political crap” by CEO Tim Cook. Continent-wide tax policy unification means that large companies can no longer base their European operations in Ireland to benefit from what were some of the lowest corporation tax rates in Europe.

The company has also been forced by the EU to open the NFC payment system in Apple devices so users can opt to employ a tap-to-pay service other than Apple Pay.

Margrethe Vestager’s successor has yet to be announced, and the post is currently held by Didier Reynders in the interim. Apple’s lobbying interests in the EU will no doubt be hard at work to encourage the appointment of a new competition commissioner who is more friendly towards big technology companies’ interests.

Periodic penalty payments – Apple fined again?

However, discussions behind closed doors will need to be swift. Under the DMA, fines for repeat offences can be up to 20% of an organisation’s annual turnover, with ‘periodic penalty payments’ of up to 5% of average daily turnover. For Apple, those sums will be significant, assuming that there is no favourable change to the DMA statutes, or the company is unable to mire due process in rounds of appeals.

Big tech’s battles with the EU are sometimes seen as indicative of the grounds on which governments elsewhere might take action. The recent change in presidency in the US may herald a more pro-domestic business environment at home, but trade tariffs imposed on imports to the US could stiffen the EU’s resolve to limit unbridled free-marketism (AKA monopolies) on the European side of the Atlantic.