Apple Faces EU Fine Up to $39 Billion Over App Store Rules

The European Commission plans to levy penalties against Apple within weeks for violating the Digital Markets Act, according to two people familiar with the investigation. Fines can reach 10% of worldwide annual revenue, a threshold that would hit Apple's top line harder than any previous EU technology ruling.

The investigation centers on Apple's App Store rules. Regulators say the company's revised fee structure and in-app payment restrictions still block developers from steering users to alternative distribution channels. That is the same conduct that drew a €1.8 billion music-streaming fine last year, this time under a law with broader enforcement teeth.

Apple generated $391 billion in revenue last fiscal year. A 10% penalty would amount to about $39 billion. Even a smaller fine in the range of 5% would exceed the company's entire services margin for a quarter. The commission has signaled it wants a penalty that deters repeated violations, not just a cost of doing business.

The immediate risk is financial. The second-order effects may be larger. A finding of non-compliance could force Apple to open iOS to alternative app stores, sideloading, and third-party payment processors. That would erode the roughly 30% commission the App Store collects on digital goods, a high-margin revenue stream that analysts estimate contributed about $24 billion in profit last year.

European regulators have set a compliance deadline in early July. Apple can appeal any ruling to the European Court of Justice, a process that takes 12 to 18 months. During that period, the company would have to implement changes while the appeal proceeds, creating operational uncertainty for developers and investors, the people said.

The market is pricing a 4% to 6% revenue hit, based on analyst models cited by Bloomberg. A worst-case scenario that includes a second case under the DMA's anti-circumvention provisions could test the $170 support level that held during the last regulatory selloff in March. The stock traded at $172 Monday.