EU sues Apple over App Store payment practices

Apple (AAPL) faces a new legal battle as the European Union accuses the tech giant of violating recently implemented digital competition legislation. The allegations center around Apple's App Store practices, which regulators claim prevent app developers from offering alternative purchasing methods.

Yahoo Finance's legal reporter Alexis Keenan breaks down the details of the lawsuit, providing insights into how it could impact Apple's operations moving forward.

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This post was written by Angel Smith

Video Transcript

Well.

The European Union is charging Apple for failing to comply with an anti competition law, UH, regulators there, alleging the iPhone maker's APP store prevents developers from steering customers to alternative ways to make purchases.

Now, if the EU proves that the tech giant broke the rules, Apple could be fined as much as 10% of its worldwide revenue.

Taking a look at shares here, extended hours pre market on the back of the news they are flat, still barely holding on to gains here.

But this was significant, especially considering some of the changes that the European Commission has made with regard to its digital markets act.

Uh, as they are saying that Apple is preventing APP developers from freely steering customers to alternative channels for offers and for content as well.

Um, and they're also looking across Apple's new core technology fee, saying that that falls short of ensuring effective compliance with Apple's apple obligations under the D MA as well.

Yes, it's interesting, because this follows another similar move that the EU made against Apple.

This is back in March, and that led to fines totaling around 1.8 billion.

So about about $1.9 billion.

Initial estimates that we're hearing this morning indicate that the fine for Apple this time around could be similar.

Could be another $2 billion fine, based on kind of the regulation tracking that analysts do in this space but $2 billion.

That's obviously not necessarily a massive downward pressure for a company like Apple, but it's not nothing, and it's more so related to If, in fact, this does lead to pressure for Apple to change its practises, what could that do to its revenue moving forward?

Given that this is a company that's already been under pressure in other areas?

Brad, including sales of the iPhone, that's right.