European Union regulators have accused Apple of violating new laws aimed at curbing the power of major tech firms. The European Commission, responsible for overseeing competition within the EU, alleges that Apple’s App Store practices stifle competition from rival platforms. This marks the first instance where a company has been found in breach of the Digital Markets Act (DMA).
Apple faces potential penalties amounting to up to 10% of its global revenue if it fails to comply with these regulations. The tech giant asserts its confidence in its compliance with the law and has been given the opportunity to review preliminary findings of the investigation. It can potentially avoid hefty fines by proposing measures satisfactory to the EU.
According to the European Commission, app developers should have the freedom to inform users about alternative, possibly cheaper app stores beyond Apple’s ecosystem. Apple currently charges developers an average commission of 30% on the App Store, a practice that has drawn scrutiny from regulators. Previously in March, Apple was instructed to allow alternatives within the EU.
“We believe that the App Store rules restricting app developers’ communication with their users may violate the DMA,” stated EU Commissioner Thierry Breton. Additionally, the Commission contends that Apple’s commission fees exceed what is necessary.
In response, Apple has implemented changes in recent months to ensure compliance with the DMA. The company asserts that over 99% of developers will either pay the same or less under the new business terms it has introduced. These changes include enabling developers to direct users to external websites for purchases at competitive rates.
Apple argues that its strict App Store rules provide users with robust security measures, a point challenged by the Commission, which is open to discussing security concerns.
Separately, the European Commission has initiated another investigation into Apple’s new contractual terms for developers. This investigation focuses on several areas, including a fee Apple charges for apps downloaded outside its App Store, the steps required for users to access alternative app stores, and whether Apple’s criteria for alternative app store developers comply with the DMA.
Apple has adjusted its eligibility criteria in March to facilitate the establishment of alternative app stores and removed the fee for apps that generate no revenue, such as those developed by students, in May.
