Digital Market Act to be implemented next month
Big tech regulation expected to strengthen in earnest
The U.S. also investigates Apple’s closed ecosystem
NYT “We will file a complaint as early as the first half of the year”
It has been reported that the European Union (EU) plans to impose a fine of 500 million euros (about 720 billion won) on Apple for violating anti-trust laws. This is the first time that EU authorities have imposed a fine on Apple, and with the implementation of Europe’s Digital Markets Act (DMA) in March, strengthening regulations on big tech companies is expected to begin in earnest.
The Financial Times (FT), citing sources, reported on the 18th (local time) that the European Commission has decided to impose a fine of 500 million euros on Apple early next month. The fine is based on the judgment that Apple forced a specific payment method (in-app payment) on app operators and disadvantaged other companies that compete with Apple Music, its music streaming service.
The EU’s ‘fine bomb’ comes as regulatory authorities in major countries are increasing the level of pressure on Big Tech’s foul play that hinders fair competition. As the United States is also investigating Apple’s anti-trust activities, the conflict between the government and Big Tech is expected to intensify.
“We can’t even send (promotional) emails to Apple customers.”
This is what Daniel Ek, CEO of Swedish music streaming company Spotify, said when filing a complaint against Apple to the European Commission in March 2019. Spotify complained to Apple that its subscription price would be higher than that of Apple Music if it used in-app payment (internal payment), a payment method that requires a 30% commission. Accordingly, it was argued that by encouraging people to use external payments, Apple not only blocked the path to cheaper services than Apple Music, but also blocked customer promotions.
The European Commission subsequently conducted an extensive investigation for nearly four years. As a result, it appears that Apple judged that if it did not receive the 30% payment fee, it would prevent fair competition by blocking the exposure or promotion of music services such as Spotify.
An EU competition authority official told the FT, “Apple’s actions were illegal and violated EU rules governing competition in the single market,” and added, “We will ban Apple from preventing users outside the App Store from switching to cheaper alternatives.” “He explained.
Some analysts say that the EU’s ‘fine bomb’ against Apple is an indication of the EU’s willingness to engage in an anti-monopoly war with big tech companies in the future ahead of the full implementation of the DMA in March. DMA strictly prohibits Big Tech from using its platform to advantage to sell its own services.
Not only the EU but also the United States is putting the brakes on the anti-monopoly actions of big tech, including Apple. The U.S. Department of Justice has already filed lawsuits against Meta and Amazon, including Google’s antitrust actions in the advertising sector. The New York Times (NYT), citing an insider, reported, “The Justice Department has been investigating Apple’s antitrust activities and will file a lawsuit against Apple in federal court as early as the first half of the year (January to June).”
In particular, Apple is suspected of selling its products and services to customers more advantageously than its competitors through hardware (iPhone) and software (App Store). The unique ‘closed ecosystem’ is being interpreted as an act of disrupting competition by abusing the platform.
Apple, which has reached a breaking point in increasing iPhone sales, is recently attempting to find growth engines through services such as Apple Pay, Apple Music, and Apple TV. However, there are also analyzes that such attempts will be put on hold due to the actions of regulatory authorities such as the EU and the US. In fact, Apple’s stock price fell 4.83% in the past month, and it also lost the top spot in market capitalization to Microsoft (MS). On the other hand, during the same period, the Standard & Poor’s (S&P) 500 index, centered on large-cap stocks, rose 3.42%.
NYT said, “The lawsuit expected to be filed against Apple in the future is likely to be much more extensive than previous lawsuits,” adding, “Apple has attracted consumer loyalty by combining devices such as the iPhone and Apple Watch and services such as Apple Pay. “’s powerful business model could be attacked from all directions,” he predicted.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.