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EU Regulators Accuse Apple Of Breaching Tech Rules

By Nithya Bose in Apple News, posted June 25, 2024

EU regulators have accused Apple of violating new tech rules by restricting App Store customers from being directed to alternative options.

The European Commission, the EU’s executive arm, announced that Apple’s practices breach the Digital Markets Act (DMA).

DMA is a landmark law to limit the power of major tech companies.

The DMA was enforced in March.

It prohibits tech firms from blocking businesses from informing users about cheaper alternatives or subscription options outside of app stores.

The investigation into Apple, Alphabet, and Meta has primarily focused on these anti-steering rules.

Regulators found Apple’s App Store rules hinder app developers from freely guiding consumers to alternative channels for offers and content.

Apple: "We are confident our plan complies with the law, and estimate more than 99 percent of developers would pay the same or less in fees to Apple under the new business terms we created"

Apple allows developers to provide links directing users to a webpage for content purchases, like subscriptions.

However, the European Commission said several restrictions imposed by Apple hampers this process.

It prevents developers from effectively communicating, promoting offers, and concluding contracts through their preferred distribution channels.

The commission also criticized the fees Apple charges developers for acquiring new customers through the App Store.

It says they exceed what is strictly necessary.

Apple said: “We are confident our plan complies with the law, and estimate more than 99 percent of developers would pay the same or less in fees to Apple under the new business terms we created.

“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.”

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If found in breach, Apple could face fines of up to 10 percent of its worldwide annual turnover.

This isn’t the first time Apple has faced scrutiny from EU regulators.

In March, the company was fined 1.8 billion euros ($1.93 billion) for allegedly abusing its market dominance in the distribution of music streaming apps.

The European Commission has also launched a new investigation into Apple’s recent contractual terms with developers.

Apple has made major changes to its App Store in expectation of the DMA.

This includes allowing apps to be downloaded from websites and third-party app stores.

The commission examines whether Apple’s “core technology fee” of 50 euro cents ($0.54) per app installed outside its App Store complies with the DMA.

Regulators assess whether the steps required to download alternative app stores or apps and the eligibility requirements to offer alternative app stores or directly distribute apps from the web on iPhones adhere to the tech law.

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