Apple Could Attract Daily Fines Worth 5 Percent of Its Annual Global Turnover in the UK

BY Chandraveer Mathur

Published 6 May 2022

App Store

Previous reports suggested that the British antitrust authority, the Competition and Markets Authority (CMA), won’t be able to regulate Big Tech firms like Apple without parliamentary approval. The Department of Culture, Media, and Sports (DCMS) says it will empower the CMA with the required powers to independently penalize tech firms that don’t comply with regulations.

For the uninitiated, the UK government opened an antitrust investigation into Apple’s App Store business practices in March 2021. The CMA was overseeing this investigation. A separate investigation followed. After probing Apple and Google, it determined that both companies control their ecosystems with an iron fist. It found that the iPhone maker can impose unreasonable terms and conditions for App Store usage and get away with it because sideloading apps and third-party app stores are not allowed in the ecosystem.

The government planned to establish a Digital Markets Unit (DMU) under the CMA’s purview. The new body’s objectives would ensure big tech companies abide by a set code of conduct or face heavy fines. As much as 10 percent of the company’s global turnover could be imposed as a fine for flouting regulations. Although the CMA published an interim report that the Cupertino giant vehemently opposed, the market regulator’s subsidiary body (the DMU) doesn’t have any additional statutory powers to levy penalties.

Yesterday, a government spokesperson confirmed that the DMU would be given the requisite statutory powers to boost competition by keeping the market dominators in check. The Department of Culture, Media, and Sports says it hopes the statutory powers will level the playing field in the tech industry.

“The dominance of a few tech giants is crowding out the competition and stifling innovation… We want to level the playing field and we are arming this new tech regulator with a range of powers to generate lower prices, better choices, and more control for consumers while backing content creators, innovators, and publishers, including in our vital news industry (sic).”

The announcement specifies that the DMU will soon be given the statutory power to fine a company as much as 10 percent of its annual turnover for a violation. Additionally, the regulatory body could add a daily fine of as much as five percent of the violating company’s global turnover if the violation continues.

If Apple is subject to fines in a manner resembling the Dutch market regulator’s response in the dating app dispute, its penalties in the UK could run into millions of dollars quickly. However, the UK government has not specified when the DMU’s powers will come into effect.

The DCMS reportedly declined to comment on whether or not the DMU’s empowerment will be a part of the Queen’s speech this year. BBC News also failed to elicit a response from the Big Tech firms which could bear the brunt of the DMU’s powers, including Apple, Google, and Meta.

[Via BBC News]