European Union regulators have accused Apple of violating new laws aimed at curbing the power of big tech companies.
The European Commission, responsible for overseeing competition within the EU, has claimed that Apple’s App Store stifles rival marketplaces. This is the first instance where a company has been found in breach of the Digital Markets Act (DMA). Apple could face a substantial fine, potentially up to 10% of its global revenue, if it fails to adhere to the regulations.
Apple has stated that it is “confident our plan complies with the law”. The company has been given the opportunity to review the investigation’s preliminary findings and can avoid a hefty fine by proposing a satisfactory plan to the EU.
The European Commission asserts that developers should be allowed to inform customers about cheaper app stores outside of Apple’s control. Currently, Apple charges developers an average commission of 30% on its App Store. In March, the company was previously instructed to permit alternatives within the EU.
“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,” said EU Commissioner Thierry Breton. The Commission further alleges that Apple’s fees “go beyond what is strictly necessary”.
In response, Apple has indicated that it has made changes over the past few months to ensure compliance with the DMA. “We estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created,” the company stated. “All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate.”
Apple argues that users benefit from strong security measures by using the official App Store. The European Commission has expressed willingness to discuss security concerns.
New Terms
Separately, the European Commission has launched another investigation into Apple regarding new contractual terms for developers. This investigation focuses on three main areas:
- A fee of €0.50 (£0.42) that Apple charges developers for every app downloaded outside of Apple’s App Store.
- The number of steps Apple requires users to take to download apps from alternative stores.
- Whether Apple’s eligibility criteria for alternative app store developers violate the DMA.
Apple states that it revised its eligibility criteria in March to make it easier for developers to establish app stores. Additionally, in May, Apple removed the €0.50 fee for apps that do not generate revenue, such as those created by students.
