Apple has faced legal challenges in two important markets, the European Union and Russia, accused of abusing its dominant market position in app stores and charging devices to the detriment of consumers and competitors. To avoid larger fines and sanctions, Apple had to make concessions, reducing its commission on in-app store transactions from 30% to 17% and paying a $17.4 million fine to Russia.
The legal dispute can be traced back to 2015, when the European Commission began an investigation into Apple's tax arrangements and business practices, arguing that Apple used its monopoly position in app stores and charging interfaces to restrict the entry of third-party apps and devices, thereby increasing the cost of use for consumers and reducing market competitiveness. Apple argues that its app store and charging interface are designed to ensure user safety and experience, and that its commission ratio and device** are reasonable.
However, the European Commission is not buying it and continues to pressure Apple to change its business model or face fines of up to $27 billion. Russia filed a similar lawsuit against Apple in 2022, accusing it of violating antitrust laws, hindering competitors and harming consumers. In 2023, a Russian court ruled in favor of the plaintiffs, requiring Apple to pay a $17.4 million fine within 30 days and allow the presence of third-party apps on its app store.
In the face of these legal pressures, Apple finally chose to compromise and try to reach a settlement with the European Commission, while also paying the fine to Russia on time. Apple CEO Tim Cook said in a statement that Apple has always been committed to providing users with the best products and services, while also respecting the laws of each market, and he hopes that through this adjustment, it can establish a more harmonious cooperative relationship with the European Union and Russia.
However, Apple's compromise in the EU and Russia did not allow its problems in other markets to be resolved. The Chinese market is Apple's largest overseas market, accounting for nearly 40% of its total revenue. But Apple users in China face a similar dilemma, often paying 30 percent more than non-Apple users when using apps like ride-hailing and food delivery, because Apple takes a 30 percent commission on its in-app store transactions, which is often passed on by app developers to consumers. In addition, Apple's charging equipment, such as earphones, charging cables, adapters, etc., are also more than 10 times more expensive than other brands of devices, which makes many consumers dissatisfied.
Consumers and app developers in China have expressed strong feelings about Apple's approach, believing that Apple has used its dominant market position to engage in unfair competition and infringe on their legitimate rights and interests. They called on China** to investigate and regulate Apple, requiring it to change its business model, reduce the percentage of transactions in its app store, and also allow the presence of third-party apps and devices. They also demanded that Apple pay compensation to consumers and app developers in China to make up for their losses.
Apple's problems in the Chinese market have attracted the attention of China's **, and China's State Administration for Market Regulation has launched a preliminary investigation into Apple, and if it is found to have violated the law, it will be severely punished. It will be interesting to see whether Apple will be able to defuse the crisis through compromise, as it has done in the EU and Russia, or whether it will stick to its business model and confront China** and consumers.