EU regulators are set to hit Apple with a preliminary DMA violation over its core technology fee, risking fines up to $38 billion and setting a precedent for platform rules.
The European Commission is expected to issue a preliminary finding against Apple as soon as next week, three people with knowledge of the process said. The case centers on whether the company's App Store fee structure violates the Digital Markets Act by charging developers a "core technology fee" that effectively locks them into Apple's payment system.
A negative finding could carry a fine of up to 10% of Apple's global annual revenue. That would be roughly $38 billion based on fiscal 2024 sales. The Commission has not confirmed the timing, but the people said a draft decision has circulated among senior officials for two weeks.
The DMA requires Apple to allow sideloading and alternative payment methods. Apple introduced the core technology fee – €0.50 per first annual install per user account – in March 2024 as part of its compliance plan. Developers who opt out of the App Store still pay the fee, which critics say makes alternatives economically unviable.
Apple has argued the fee covers the value of its platform and developer tools. "The DMA required us to open the iPhone to sideloading, and we did," an Apple spokesperson said. "The core technology fee reflects the ongoing investment in security and distribution that every developer benefits from."
The Commission's preliminary view, according to the people, is that the fee structure constitutes a "gating measure" that undermines the DMA's objectives. A formal statement of objections would begin a process that could lead to fines, behavioral remedies, or both.
Affected assets reach beyond Apple's stock. Spotify, Epic Games, and a coalition of smaller developers have filed complaints. A penalty could set a precedent for how other platform companies – notably Alphabet and Meta – structure their own DMA compliance.
What would reduce the risk: Apple adjusts the fee downward or exempts developers below a revenue threshold. The company already lowered the rate from €0.50 to €0.15 for small developers in August 2024. A broader concession could satisfy the Commission before a final ruling.
What would worsen it: The Commission issues a non-compliance decision with daily penalty payments, which can reach 5% of average daily worldwide turnover. That would add roughly $5 million per day to Apple's legal tab and pressure the company to negotiate under a deadline.
The Commission's formal decision is expected within the next two to four weeks. Apple shares have already priced in some risk, down 3.2% since the start of April. Options markets imply a 4.5% move on the day of any announcement.
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