Apple Accused by European Commission of Breaking Digital Market Regulations
The rules of the EU’s DMA mandate that Apple’s App Store must allow developers to guide customers toward ‘alternative cheaper purchasing possibilities’ without any additional charges.
An investigation conducted by the European Commission into Apple revealed that the company’s policies within the App Store violate the Digital Market Act (DMA) by restricting developers from freely directing consumers to other channels for purchases.
According to the DMA regulations, developers distributing their apps through Apple’s App Store should have the ability to inform customers about cheaper purchasing options, lead them to these alternatives, and facilitate purchases, all without imposing any fees.
On June 24, the Commission issued a press release stating that Apple was not compliant with these requirements. It was noted that Apple’s existing business terms do not permit developers to freely guide their customers as required by the DMA regulations.
Apple’s restrictions include prohibiting developers from displaying pricing information within their apps and restricting communication to promote offers from other sales channels. While Apple allows ‘link-outs’ for steering, these are subject to stringent restrictions from the company.
In response to media inquiries, Apple mentioned that they have made several changes over the past few months to adhere to DMA regulations after taking into account feedback from the Commission and developers. The company asserted that all developers on the EU’s App Store can leverage the introduced capabilities to guide app users to web-based purchases at competitive rates.
Apple’s current practice of charging a fee when a developer acquires a new customer via the App Store has been scrutinized by the Commission for exceeding what is considered necessary for such remuneration. For example, Apple imposes fees on purchases made within seven days after a user clicks on a ‘link-out’ from the app.
The Executive Vice President overseeing the EU’s competition policy stated that steering is essential to reduce developers’ dependency on app stores run by gatekeepers like Apple and to ensure that consumers are aware of better offers.
Under the DMA regulations, gatekeepers are defined as businesses with a significant presence across multiple EU countries, carrying economic significance, and having a considerable impact on the market. In September 2023, six companies, including Apple, were designated as gatekeepers and had a deadline to comply fully with the DMA rules.
If the Commission determines that Apple has violated the regulations, it can impose fines of up to 10 percent of Apple’s global turnover. Repeated violations can result in increased fines up to 20 percent, and additional measures may be taken in case of systemic infringements.
Apple has been alerted of the preliminary findings by the Commission and has the opportunity to respond in writing. Failure to comply within 12 months may result in a non-compliance decision being issued by the agency.
Anti-competitive investigations were launched by the Commission against Apple, Alphabet, and Meta on March 25 for potential breaches of DMA rules. Earlier, Apple was fined over 1.8 billion euros by the Commission for engaging in unfair trading practices related to music streaming apps on iOS devices.
Apple objected to the Commission’s decision and stated that it was reached without credible evidence of consumer harm and disregarded the competitive nature of the market. The company criticized the ruling as being based on flawed premises.
The Epoch Times reached out to Apple for comment but had not received a response by the time of publication.
