UK Planning Huge Fines for Companies Like Apple That Do Not Meet New Rules

Following reports that the UK government had dropped plans to heavily regulate Apple and other big tech companies using a new Digital Markets Unit (DMU), the Department of Culture, Media and Sport (DCMS) has assured that it will empower the DMU with statutory powers to penalize firms that do not meet its rules (via Reuters).

app store blue banner uk fixed
The government announced plans to set up the DMU in 2020, stating that it would grant powers to the body to create a code of conduct that big tech companies have to abide by in the UK or face fines of 10 percent of annual turnover. An interim report published by the Competition and Markets Authority (CMA) earlier this year was intended to focus the DMU's attention, and it was met with an aggressive response from Apple.

While the DMU currently exists with around 60 members of staff, it has no powers beyond the CMA's existing capabilities. The DMU is currently working on a number of investigations, including into the terms of Apple's App Store and Apple and Google's "duopoly" over mobile ecosystems. A government spokesperson yesterday confirmed that the DMU will be given powers to address the "predatory practices" of some big tech companies with the aim of boosting competition and giving users more control.

The DCMS's proposals include provisions to make it easier for users to switch between iOS and Android, and give users more control over search engines and how their data is used. App developers would be able to distribute their apps "on fairer and more transparent terms." There are also plans to give small and medium-sized businesses better pricing from services offered by big tech companies, as well as insights into the algorithms that drive traffic and revenues. Digital minister Chris Philp said:

The dominance of a few tech giants is crowding out competition and stifling innovation... We want to level the playing field and we are arming this new tech regulator with a range of powers to generate lower prices, better choice and more control for consumers while backing content creators, innovators and publishers, including in our vital news industry.

The DMU will be able to fine companies that break its code of conduct 10 percent of their annual global turnover, with an extra five percent of daily global turnover added per day that the violation continues. In Apple's case, this could quickly reach fines of tens of billions of dollars if it is found to have broken the DMU's rules. Senior managers could also face civil penalties if their companies are deemed to have not engaged properly with requests for information.

A spokesperson for the DCMS declined to comment on if legislation to empower the DMU will be included in this year's Queen's Speech, which sets out the government's agenda for the coming year. It is still unclear when exactly the powers will come into force, with the government simply saying that the necessary legislation will come "in due course."

Apple's ecosystem is increasingly coming under intense scrutiny by governments around the world, including in the United States, Japan, South Korea, the European Union, and more, with a clear appetite from global regulators to explore requirements around app store policies, app sideloading, and interoperability.

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Top Rated Comments

Sakurambo-kun Avatar
28 months ago
Bizarre how when we (UK citizens) were in the warm embrace of the EU family the Conservatives endlessly moaned about how the EU over regulates business. Now we're out in the cold they... endlessly regulate business. They're even now talking about forcing Netflix etc and TV manufacturers co promote UK content over everything else, which sounds just a few steps away from China, Saudi Arabia, Iran etc.

I guess that's what happens when you elect economically illiterate authoritarian populists who haven't got a clue and are floundering in the polls.
Score: 27 Votes (Like | Disagree)
Koudspeel Avatar
28 months ago
Apple should leave the UK market.
Score: 22 Votes (Like | Disagree)
Macropanda Avatar
28 months ago
How can one country decide to fine a company 10% of their global annual turnover? That just ridiculous.
what if 11 countries did that? 10% of their UK turnover is much more realistic.

Or am I missing something?
Score: 16 Votes (Like | Disagree)
MajorFubar Avatar
28 months ago
This from a govt who can't even regulate it's own inner circle of politicians to not have a party at Number 10 during a period when the rest of us were told we would be fined if we visited our own friends and families.
Score: 9 Votes (Like | Disagree)
Moonjumper Avatar
28 months ago

Apple should leave the UK market.
Apple are doing well here, so I don't see them leaving, but for companies where the profit margins are slim, these draconian regulations (this isn't the only UK example) will drive them away, and it will stop new entrants to the market.

Also, I can see Apple delaying new services to ensure they are compliant, and the same for many other companies.

The Conservatives are doing everything to shun the world, but seem surprised the UK is getting shunned by the world as a result.
Score: 9 Votes (Like | Disagree)
Patchwork Avatar
28 months ago
i doubt this will get very far, the UK simply hasn’t got the resources to take on the big tech firms. It also risks damaging agreement of a trade deal with the USA, a big target for the current UK government.
Score: 7 Votes (Like | Disagree)