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Apple Becomes First Target Of EU’s New Digital Competition Rules Aimed At Big Tech
LONDON — On Monday, European Union regulators filed the first allegations under the bloc’s new digital competition regulation, accusing Apple of prohibiting software developers from directing users to cheaper alternatives outside its software Store.
According to the European Commission’s early conclusions, the iPhone maker’s limits on developers using its mobile App Store violate the Digital Markets Act of the 27-nation bloc.
The rulebook, also known as the DMA, is a comprehensive set of restrictions to prevent electronic “gatekeepers” from monopolizing digital marketplaces under the fear of severe financial penalties. After taking effect in March, the commission launched a first set of inquiries, including a separate ongoing examination into whether Apple is doing enough to make it easy for iPhone users to switch web browsers and additional instances involving Google and Meta.
Apple | AP News Image
Apple Becomes First Target Of EU’s New Digital Competition Rules Aimed At Big Tech
Apple has faced pressure from both sides of the Atlantic to remove some competitive obstacles surrounding its lucrative iPhone business. This year, the US Justice Department filed a massive antitrust lawsuit against Apple, accusing the company of unjustly monopolizing the smartphone market, locking out competitors, limiting innovation, and unfairly raising prices. App developers such as Spotify had long complained about Apple’s restriction that subscriptions be purchased solely through iOS applications, which allowed the corporation to charge up to a 30% fee.
According to the DMA, app developers must be able to advise clients about cheaper purchase options and direct them to those offers.
The commission, the bloc’s executive arm, stated that App Store policies “prevent app developers from freely steering consumers to alternative channels for offers and content.”
Apple now has the opportunity to reply to the results. The commission must conclude Apple’s compliance by March 2025. The corporation could face fines of up to 10% of its global revenue, equivalent to billions of euros or daily penalties.
Regulators focused on a “core technology fee” of 50 euro cents (54 cents), which Apple now charges developers for each download and installation of their programs from sources other than Apple’s App Store. The DMA’s regulations pave the path for other app stores, giving consumers additional options.
Apple | Cap Image
Apple Becomes First Target Of EU’s New Digital Competition Rules Aimed At Big Tech
The commission stated that the additional terms are a “condition for access to some of the new features enabled by the DMA.” Rivals had questioned the price, claiming it would dissuade many existing free apps from leaving the platform.
“We are concerned that Apple’s new business model makes it too difficult for app developers to operate as alternative marketplaces and reach their end users on iOS,” European Commissioner for Competition Margrethe Vestager stated on social media.
Apple Inc. stated that during the last few months, it “has made a number of changes to comply with the DMA in response to feedback from developers and 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,” according to a statement from the company. “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.”
Apple | Medium Image
Apple Becomes First Target Of EU’s New Digital Competition Rules Aimed At Big Tech
The corporation announced it will “continue to listen and engage” with the commission.
Since 2020, the EU has conducted a similar inquiry to determine whether Apple’s in-app purchasing system and limits breach Brussels’ antitrust regulations. However, “to avoid multiple investigations into the very same conduct,” the commission said Monday that the probe is being closed to focus on the investigation under the DMA, which explicitly spells out what Apple cannot do.
SOURCE – (AP)
