Biting the APPLE of Discord: EU's Historic Crackdown on Tech Giant

We’re in for some history – though it’s not the kind that Apple is accustomed to making. The company known for beautiful design and rocket ship technology has stirred shockwaves throughout the tech sector by becoming the first ever company to be sanctioned under the European Union’s Digital Markets Act (DMA). That makes the DMA the EU’s latest attempt to tame the Beast that is Big Tech, with Apple as its first casualty. Let’s see how we got here.

The Heart of the APPLE Controversy

What’s at stake is Apple’s attitude towards third-party application developers. According to a scoop last week in Bloomberg, the European Commission will soon levy a fine of up to 10 per cent of Apple’s annual global sales, which is a staggering amount on a company that has more than $250 billion in its back pocket. What the EU found objectionable in Apple was exactly what the Cantonese found objectionable in the QG: Apple prohibits third-party app developers from promoting their software at more attractive prices outside of the App Store.

A History of Regulatory Tussles

This isn’t the first time that Apple has found itself in the crosshairs of regulators either; it was recently hit with another fine totalling around $2 billion for similarly stifling Spotify from offering cheaper plans outside of the App Store from within its app – but that was under the EU’s traditional antitrust rules, before DMA.

The Digital Markets Act: A Force for Change

A provision of the DMA, set to come into force from November 2022, will encourage the unbundling of the dominant vertical structures within monopolistic industries associated with a few technology giants, and force big tech companies, known as ‘gatekeepers’, to maintain open access for third-party companies on their core platform.

APPLE's Concession and Continued Defiance

Since the DMA took effect, Apple has had to make major changes to its core services such as the App Store within the EU, even as the European Commission continues to investigate Apple’s compliance with these new rules in other areas of its core platforms. The fine is likely to be the first of many penalties that Apple will be required to pay if it fails to follow the DMA’s mandated terms in full.

The Implications for APPLE and Beyond

The potential fine itself is only one consequence – the first real test of the DMA’s unprecedented regulation of the digital world – but it’s nonetheless an existential threat to Apple. The EU has made it clear that it will make digital the fairest market in the world – a market that can innovate and that’s not at the mercy of monopolists.

Shaping the Future of Digital Commerce

The case between Apple and the EU is not just a legal battle; it’s a story about the direction digital commerce will take and the role of regulatory oversight in shaping the path of tech innovation. As Big Tech becomes increasingly dominant, the DMA represents a meaningful shift in tipping the balance in favour of smaller companies that can also compete.

APPLE's Next Moves

Their reaction to this regulatory pressure – if they comply with the bits of the DMA that apply to them, if they challenge those decisions in front of a court, or if they attempt more reform in their platform policies – will be a matter of keen interest, as it could serve as a precedent for other tech giants negotiating their way through these first-ever strictures.

Looking Forward: A Digital Marketplace Transformed

This case will be seminal for the tech industry at large, and – now that the dust has settled – it’s likely momentum will pile up behind the actions and policies it prescribes. The EU appears to be ready to do anything it takes to enforce a more competitive digital environment, and in doing so will set the path for a new type of tech future with an industry that is more inclusive and diverse.

About APPLE

Apple Inc., the star of this dramatic regulatory saga, is a global technology trailblazer and innovator whose products and services have revolutionised a wide array of industries. Its groundbreaking iPhone, the svelte MacBook laptop, the wildly successful App Store and a cornucopia of other software products redefined hardware design, performance and user experience in our digital age.The software side of the company’s business, though it has not developed much drama of its own so far, is shaping the digital marketplace through its app-oriented ecosystem that accommodates millions of pieces of content carefully calibrated to various consumer needs. In spite of its current predicament, the company shows no signs of slowing down its pace of innovation, promising to continue to deliver to us ever more life-enhancing technologies that benefit humanity in countless ways.

In watching this unfold, we are witnessing the new world order for the tech industry: the beginning of a symbiotic, if not harmonious, relationship between regulation and corporate innovation. Apple, a leader in the revolution, has reached a critical point, and its next moves will probably set the digital economy on its path well into the future.