European Union regulators have accused Apple of breaching new laws aimed at curbing the dominance of big tech companies. The European Commission, responsible for overseeing competition within the EU, has charged Apple with squeezing out rival marketplaces through its App Store. This marks the first instance of a company being found in violation of the Digital Markets Act (DMA).
Apple could face a fine of up to 10% of its global revenue if it fails to comply with the regulations. However, the tech giant remains confident that its current practices align with the law. Apple has the opportunity to review the preliminary findings and propose satisfactory changes to avoid substantial fines.
The European Commission contends that developers should be allowed to inform customers about cheaper app stores outside of Apple’s ecosystem. Currently, Apple charges developers an average commission of 30% on its App Store. This past March, the EU mandated Apple to permit alternatives.
EU Commissioner Thierry Breton stated, “We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA.” Additionally, the Commission claims that Apple’s fees exceed what is necessary.
In response, Apple highlighted recent changes made to comply with the DMA. The company estimated that over 99% of developers would pay the same or lower fees under new business terms. Apple’s statement emphasized the introduction of capabilities that allow developers to direct app users to the web for purchases at competitive rates.
Apple also defended its App Store, citing strong security measures that benefit users. The European Commission expressed willingness to discuss security concerns further.
In a separate investigation, the European Commission is examining new contractual terms for developers imposed by Apple. This probe focuses on three areas:
A €0.50 fee charged to developers for each app downloaded outside of Apple’s App Store.
The number of steps required for users to download apps from alternative stores.
Whether Apple’s eligibility criteria for alternative app store developers violate the DMA.
Apple asserted that it revised its eligibility criteria in March to facilitate the establishment of alternative app stores by developers.