The European Commission says Apple violated the EU’s Digital Markets Act (DMA) over its App Store policies. This violation could end up costing the iPhone maker billions.
Apple is allegedly in breach of the DMA for preventing app developers from steering their customers to other options for content and pricing, according to a report from the commission released on Monday. The preliminary findings from the investigation into Apple’s practices found that the company’s terms with developers prevent them from providing pricing info or promoting alternative channels within the app. Instead, developers have to include a link within the app that takes a customer to a web page where they learn more about the alternative. If a developer’s customer makes a purchase of digital goods or services via that link within a week, that developer must then pay Apple a fee.
“Our preliminary position is that Apple does not fully allow steering,” said Margrethe Vestager, executive vice president in charge of competition policy for the Commission. “Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers.”
Apple says it has made changes to comply with the DMA and continues to listen to the European Commission.
“We are confident our plan complies with the law, and 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 said in an emailed statement. “All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate.”
This charge could mean a big fine for Apple. The EU could hit Apple with a penalty of up to 10% of the company’s global revenue, according to the Financial Times. Based on recent financials, that could cost Apple more than $US30 billion in fines, which could double if the European Commission finds Apple repeated the offense. For the fine to happen, the findings will have to be finalized within a year from when the investigation started, which was in March of 2024.
These preliminary findings are the first big charge by the Commission against the Big Tech companies, which it has labeled as “gatekeepers.” Some of the companies considered to be gatekeeping by the EU are TikTok, Meta, Microsoft, and Google. Thanks to the regulations Apple has faced in the EU, the company has brought some changes to the U.S. including adding a USB-C connection to the iPhone 15 and the upcoming addition to text messaging in iOS 18.
Along with the news of the charges, the Commission said it opened another investigation into Apple. This time it’s for the company’s Core Technology Fee that requires developers of third-party app stores and apps to pay a small fee to Apple for every installed app, the process needed to download and install these alternative app stores, and the eligibility requirements for developers involved in offering these alternative.