Apple is facing a probe by the European Commission regarding its App Store rules, with preliminary findings suggesting a breach of the EU’s Digital Markets Act (DMA). According to the EU executive, Apple prevents app developers from freely steering consumers to alternative channels for content. Under the DMA, developers should be able to inform customers of cheaper purchasing possibilities and allow them to make purchases without restrictions. The Commission’s initial findings indicate that Apple’s terms do not allow for this freedom for developers, with limited options for steering customers and excessive fees charged by the company.
The Commission’s preliminary position is that Apple does not fully allow steering, which is essential for app developers to be less dependent on gatekeepers like Apple and for consumers to be aware of better offers. Margrethe Vestager, the Commission’s Executive Vice-President overseeing competition policy, emphasized the importance of steering in ensuring fair competition and consumer choice. Apple has the opportunity to review the Commission’s findings and respond in writing before a non-compliance decision can be made within 12 months.
In addition to the App Store probe, the Commission has also opened a third non-compliance investigation into Apple for its new contractual requirements for third-party app developers and app stores. The concerns include whether Apple’s Core Technology Fee, which entails developers paying a fee per installed app, complies with the DMA. While Apple has made changes to comply with the regulation, the Commission will assess whether these changes are sufficient to meet their obligations. Apple believes that their plan is compliant with the law and that the majority of developers would pay the same or less in fees under the new business terms.
Apart from Apple, the Commission has designated five other tech giants as gatekeepers under the DMA, including Alphabet, Amazon, ByteDance, Meta, and Microsoft. These companies are under scrutiny for various aspects of their operations, including rules on steering, self-preferencing, and payment models. In the event of an infringement, companies could face fines of up to 10% of their total worldwide turnover. The investigations into these tech companies reflect the EU’s efforts to regulate the digital market and ensure fair competition for developers and consumers alike. Apple and other gatekeepers will need to address the Commission’s concerns and make any necessary changes to comply with the DMA.
