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US tech company Apple has been accused of breaching the European Union’s Digital Market Act (DMA), a new set of regulations mainly targeting American companies in the digital services sector.

The DMA imposes restrictions on what the European Union calls gatekeeper companies, which, because of their market share, the European Commission accused of hindering smaller competitors.

Under the DMA’s provisions, large companies may be prevented from reusing personal data between products, such as between Facebook and its subsidiary WhatsApp. The DMA may also deter companies from self-preferencing within their platforms, among other rules that only apply to gatekeepers.

In 2023, the EU identified Alphabet, Amazon, ByteDance, Meta, Microsoft, and Apple as gatekeeper companies and gave them until March 2024 to comply with all provisions of the DMA.

This deadline has now passed, and on June 24, the EU released preliminary findings accusing Apple of non-compliance. According to the EU Commission, app developers using Apple’s app store are subject to excessive charges and cannot easily steer their customers towards new offerings.

The EU tries to hide its open cash grab and reasons that the DMA helps innovators. Thierry Breton, the EU’s internal market commissioner, said that the EU is “determined to use the clear and effective DMA toolbox to finally open real opportunities for innovators and consumers.”

However, regulations such as the DMA and the regulatory mindset are responsible for the lack of innovation in the EU. The US Chamber of Commerce has correctly pointed out that the DMA “prioritizes regulation over innovation” and ends up “managing competition rather than promoting it.”

If Apple is found guilty of violating the DMA, it could face fines as high as 20% of global revenue. Based on Apple’s 2023 revenues, this fine would amount to a whopping 76 billion USD.

All companies the EU identified as gatekeepers under the DMA provide services to European businesses. Rather than forcing these companies into compliance with absurd rules, excessive fines like those foreseen by the DMA will gradually convince companies not to offer certain services in Europe altogether, hurting those European businesses that rely on services provided by American tech companies.

The EU overregulation also hurts consumers as Apple’s advanced AI-powered features will not be available for users in the EU at the same time as the rest of the world, owing to the provisions of the Digital Markets Act.

The EU’s steady slide into industrial and digital irrelevance will likely continue if Ursula von der Leyen is reappointed to lead the European Commission. In this position, she will continue to fashion the EU into a “regulatory superpower” that uses successful American companies as their piggy bank.