The European Commission said Apple’s App Store policy violated the EU’s Digital Markets Act (DMA). The breach could ultimately cost the iPhone maker billions of dollars.
According to a report, Apple allegedly violated the DMA by preventing app developers from directing customers to alternative content and pricing options. Report The committee’s report was released on Monday. Preliminary findings into an investigation into Apple’s practices found that the company’s terms with developers prevent them from providing pricing information or promoting alternative channels within their apps. Instead, developers must include a link in the app that takes customers to a web page where they can learn more about alternatives. If a developer’s customers purchase digital goods or services through the link within a week, the developer must pay Apple a fee.
“Our preliminary position is that Apple does not fully allow manipulation,” said Margrethe Vestager, the commission’s executive vice president for competition policy. “Guidance is key to ensuring that app developers are less reliant on gatekeeper app stores and that consumers are informed of better offers.”
Apple said it has made changes to comply with the DMA and continues to listen to the European Commission’s input.
“We believe our plan complies with the law and estimate that more than 99% of developers will pay Apple the same or less under the new business terms we create,” the company said in an emailed statement. “All in Developers operating in the EU on the App Store will have the opportunity to take advantage of the features we are launching, including the ability to direct app users to the web to complete purchases at very competitive prices.”
The charge could mean a hefty fine for Apple. The EU could fine Apple up to 10% of the company’s global revenue, according to the EU Financial Times. Based on recent financial data, this could expose Apple to more than $30 billion in fines, which could double if the European Commission finds Apple repeats violations. In order for a fine to be imposed, the findings must be completed within one year of the start of the investigation, which is March 2024.
These preliminary findings are the committee’s first major accusations against big tech companies, labeling them “Watchmen.” Companies considered gatekeepers by the EU include TikTok, Meta, Microsoft and Google. Due to the regulations Apple faces in the European Union, the company has made some changes to the U.S., including adding USB-C connection to iPhone 15 and upcoming additions SMS in iOS 18.
As news of the accusations broke, the European Commission said it had launched another investigation into Apple. This time it’s the company’s core technology fee, which requires developers of third-party app stores and apps to pay Apple a small fee for each app installed, the process required to download and install these alternative app stores, and the developer’s Eligibility requires participation in the offerings of these alternatives.
