Apple, EU's First Big Tech Regulation Target... Facing Daily Fine of 70 Billion Won Crisis

Apple Likely to Be Prosecuted for Violating Digital Markets Act (DMA)

The European Union (EU) is expected to file charges against Apple for violating the Digital Markets Act (DMA), according to major foreign media reports on the 14th (local time). If Apple is charged this time, it will be the first case of a DMA violation.

According to three sources familiar with the matter, the European Commission has determined that Apple is not complying with the DMA, which aims to prevent platform operators from abusing market dominance and to promote competition. Specifically, Apple has failed to comply with the obligation to allow developers to direct users outside the App Store without charging commissions.

[Image source=Yonhap News]

If it is finally decided that Apple violated the DMA, Apple will have to pay a fine of up to 5% of its average daily global revenue. Apple's average daily revenue is $1 billion, meaning the daily fine could reach $50 million (approximately 6.95 billion KRW).

Until now, Apple has required developers to use its own payment system within the App Store and has charged commissions of up to 30%. Since the DMA came into effect in March, Apple has allowed users in Europe to download applications (apps) from developers' web browsers without going through its App Store. The transaction commission through the App Store payment system has been reduced to a maximum of 17%.

However, the European Commission views these measures as insufficient. Some developers have also claimed that the changed commission structure could result in higher fees.

The European Commission plans to announce preliminary results before August. If charges are filed, Apple will become the first big tech company to be charged with violating the DMA.

In addition to Apple, the European Commission has been investigating Alphabet, Google's parent company, and Meta, Facebook's parent company, for DMA violations since March. Foreign media quoted sources saying that the investigation results for Apple will be released before those for Meta.

However, sources said this is a preliminary investigation, and Apple may take corrective actions. If so, regulators may reassess when making a final decision, and the announcement timing could change.