Apple pays $12M fine in Russia, boosts Kremlin coffers during war

As Russian President Vladimir Putin escalates his crackdown on foreign tech companies, some are moving out. Others, however, are staying put. Apple has decided to pay a multimillion-dollar fine and continues to operate its app store in the country.

Apple, the largest company in the world, has paid a Russian fine of 1.2 billion roubles ($13.65 million), imposed over the firm’s alleged abuse of its dominant market position concerning in-app payments, Russia’s antitrust agency, the Federal Anti-Monopoly Service, has said.

The US firm is not commenting but has previously “respectfully disagreed” with a FAS ruling in February 2023 that Apple’s distribution of apps through its iOS operating system gave its own products a competitive advantage. Back then, Apple paid an around $12 million fine.

The funds have been immediately transferred into Russia’s federal budget as the Kremlin ramps up spending on its invasion of neighboring Ukraine. Russia has allocated nearly one-third of its 2024 budget to defense spending, whereas social spending is getting about one-fifth.

According to Financial Times, in order to pay fines imposed by the Russian government, US companies must seek permission from the US Treasury’s Office of Foreign Assets Control, the body that enforces trade controls.

Apple has not been selling its physical products in Russia since its invasion of Ukraine in early 2022 but its app store and some subscription services still operate.

The firm has also removed the apps of Russian propaganda outlets and sanctioned Russian banks from the store. However, Russians can still easily access the latest iPhones imported via third countries such as Turkey, former Soviet states, or the United Arab Emirates.

Officially, the Kremlin stance is uncompromising. In March 2023, the Kommersant newspaper reported that domestic political officials had to stop using iPhones.

The decision was reportedly related to online security, and in May 2023, Apple had to deny claims made by Russia’s Federal Security Service that the company was behind a coordinated spy campaign with the US government to surveil Russian iPhone users.

Western Big Tech firms have faced repeated fines and legal action by Russian regulators. In July 2022, a Moscow court fined Google over 21 billion rubles (over $387 million) for repeatedly failing to remove "illegal" content from YouTube, the illegal bit being the war-torn reality of Ukraine.