Apple's conflict with EU regulators escalates, facing the first fine under the "Digital Markets Act"

Apple Inc. is about to face its first fine under the new digital antitrust rules introduced by the European Union, marking an escalation in the conflict between Apple and regulators over its lucrative App Store dominance. Media reports citing informed sources indicate that regulators are preparing to penalize Apple for failing to allow app developers to direct users to cheaper deals and offers outside the App Store. The related penalties are being imposed under the new stringent Digital Markets Act (DMA). Unlike traditional antitrust laws, the DMA aims to prevent anti-competitive behavior before it disrupts the market. Under this law, EU regulators have the authority to impose fines of up to 10% of the global annual sales of the world's most powerful tech companies, with repeat offenders facing fines of up to 20%, or periodic fines of up to 5% of average daily revenue. Last week, Apple's financial report showed revenues of $94.9 billion, with iPhone business revenue at $46.2 billion. Just a few months ago, Apple was fined €1.84 billion (approximately $2 billion) under the EU's traditional competition rules for similar behavior. Apple had blocked streaming music platform Spotify and other music streaming services from offering payment options outside the Apple App Store. In June of this year, the EU warned Apple that it must provide developers with effective means to direct users away from the App Store, or face penalties. The European Commission may issue a fine notification before the current EU Competition Commissioner Margrethe Vestager leaves office at the end of this month, but it could also be delayed until later this year. Fines may be accompanied by periodic penalties until Apple complies with the relevant laws, and the related decision is still being drafted. Vestager has clashed with Apple multiple times during her tenure. Apple CEO Tim Cook has referred to the European Commission's case as "political nonsense." Earlier this year, EU antitrust regulators also forced Apple to allow third parties to use iPhone payment chips for transactions, enabling banks and other services to compete with the Apple Pay platform