Big Tech Under Pressure Ahead of Law Enforcement... EU Slams Apple with Heavy Fines (Comprehensive)

In the end, Apple could not avoid the EU's hefty fine. Ahead of the Digital Markets Act (DMA) enforcement on the 7th, the EU imposed a larger-than-expected fine on Apple, intensifying pressure on big tech companies.

[Image source=EPA Yonhap News]

On the 4th (local time), the European Commission fined Apple 1.84 billion euros (about 2.7 trillion KRW) for abusing its market dominance in the music streaming application market. This amount is 0.5% of Apple's global revenue and far exceeds the initially expected 500 million euros. It is also the third-largest antitrust fine ever imposed by the Commission, following Google (4.34 billion euros, 2.4 billion euros).

Margrethe Vestager, EU Commissioner for Competition, stated that Apple violated EU antitrust rules for 10 years by restricting consumers from accessing alternative and cheaper music services outside the Apple ecosystem. She explained that the fine was higher than expected to deter other big tech companies from similar conduct. She also added that Apple’s submission of incorrect information during the investigation was taken into account.

Notably, this announcement came just before the DMA enforcement this week, drawing attention. The EU is the first in the world to regulate monopolistic behavior of big tech companies through the DMA, marking the start of a full-scale crackdown on big tech. The law designates platform operators above a certain size as "gatekeepers," requiring them to open their services to competitors and restricting arbitrary use of user personal data. Besides Apple, the six designated gatekeepers include Google Alphabet, Microsoft (MS), Meta Platforms, Amazon, and ByteDance, the parent company of TikTok.

The EU plans to impose fines of up to 10% of annual revenue on these gatekeeper companies for violations, with repeated offenses potentially leading to fines up to 20%. Accordingly, the large fine imposed on Apple in line with the DMA enforcement is seen as a strong warning.

Apple is not the only big tech company under the EU’s scrutiny. Meta Platforms is currently under investigation for antitrust violations in the online advertising market, with expectations of a hefty fine similar to Apple’s. MS is also facing antitrust investigations related to its partnerships with AI startup MistralAI in France, following its involvement with ChatGPT developer OpenAI. Additionally, the EU is conducting official procedures to ensure TikTok complies with child protection regulations, based on the Digital Services Act (DSA), a platform regulation law enforced since August last year.

Apple immediately announced its intention to appeal, making a legal battle inevitable for the coming years. Apple claims that the EU Commission’s actions, under the pretext of consumer protection, actually serve to protect European companies. Apple stated, "Spotify, which holds 56% of the European music streaming market, met with the European Commission 65 times during the investigation," adding, "Ironically, under the name of competition, this reinforces the dominant position of a leading European company in the digital music market." On the day of the announcement, Apple’s stock closed down 2.54% compared to the previous session on the New York Stock Exchange.