Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Apple has paid a Rbs1.18bn ($12.3mn) fine into Russia’s state budget, after a court in Moscow found the US tech giant guilty of abusing its dominant market position through the App Store.
FAS, Russia’s anti-monopoly watchdog, announced on Monday it had received the payment following a November ruling that found Apple had prohibited app developers from informing customers that they can pay for their purchases outside the App Store.
The payment will go directly to the Russian budget, boosting the Kremlin’s coffers at a time when President Vladimir Putin’s government is raising funds to support record defence spending on prosecuting the war in Ukraine.
The dispute between Apple and Russia’s competition regulator began before the invasion in February 2022, and is not the first time it has paid fines since then.
The iPhone-maker also paid a Rbs906mn ($10.1mn) fine a year later for a different violation of antimonopoly law, according to the FAS. Other western tech groups, including Google, have paid fines following action by FAS in recent years.
In order to pay fines imposed by the Russian government, American companies must seek permission from the US Treasury’s Office of Foreign Assets Control, the body that enforces trade controls.
Apple and the US Treasury did not immediately respond to requests for comment.
Western sanctions following the outbreak of war in Ukraine led many tech companies to leave Russia, with groups such as Intel, Samsung and IBM among those to suspend business there.
Apple stopped sales of its physical products in 2022, but its App Store and some of its subscription services still operate. At the end of 2022, Apple gave up its office in the centre of Moscow, though it still has two legal entities that operate in the country.
However, Apple has removed the apps of Russian propaganda outlets and sanctioned Russian banks from the mobile store.
With iPhones still widely in use in Russia, many banks have produced disguised versions of their apps under innocuous names, seeking to avoid Apple’s efforts to cull sanctioned developers.
Russians can easily access the latest iPhones imported via third countries such as Turkey, the UAE and former Soviet states, often at significant mark-ups. The iPhone 15 starts at Rbs95,990 ($1,071) from re:store, Apple’s former authorised reseller in Russia, as opposed to $799 in the US.
App Store policies have drawn scrutiny elsewhere, with a US federal court finding its rules wrongly prevent developers from steering customers outside of their apps. Last week Apple changed its rules in the US to comply.
New EU legislation is also forcing the company to allow “sideloading”, which will enable iPhone users to bypass its store and download apps from elsewhere.
Read the full article here
