The Tech Giant also faces a third non-compliance probe over its App Store.
Apple is breaching the EU’s Digital Markets Act (DMA) with its App Store rules, the European Commission said in preliminary findings sent to the company today (24 June). According to the EU executive, the tech giant prevents app developers from freely steering consumers to alternative channels for content.
Under the DMA – the EU competition rules which took effect in March of this year – developers distributing their apps via Apple’s App Store should be able, free of charge, to inform their customers of alternative cheaper purchasing possibilities, steer them to those offers and allow them to make purchases.
The Commission’s preliminary findings suggest that none of the company’s business terms allow developers to freely steer their customers. In addition, under most of the business terms available to app developers, Apple allows steering only through “link-outs”, meaning that app developers can include a link in their app that redirects the customer to a web page where the customer can conclude a contract.
Under the DMA, Apple is allowed via the App Store to receive a fee for facilitating the initial acquisition of a new customer by developers. However, the Commission said the fees charged by Apple go beyond what is strictly necessary for such remuneration.
“Our preliminary position is that Apple does not fully allow steering. Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers,” Margrethe Vestager, the Commission’s Executive Vice-President in charge of competition policy, said in a statement.
Apple now has the possibility to examine the Commission’s findings and reply in writing.
If the Commission’s views are confirmed, it can adopt a non-compliance decision within 12 months from the opening of proceedings on 25 March 2024.
Third non-compliance probe
In addition, the Commission also opened a third non-compliance probe against the Big Tech company over fears that the company’s new contractual requirements for third-party app developers and app stores – including Apple’s new “Core Technology Fee” – do not comply with its obligations.
It will, among others, check whether Apple’s Core Technology Fee, under which developers of third-party apps must pay a €0.50 fee per installed app, is complying with the DMA.
In a statement to Euronews, a spokesperson for Apple said that the company has already “made a number of changes to comply with the DMA.”
“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. 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. As we have done routinely, we will continue to listen and engage with the European Commission,” the spokesperson said.
Besides Apple, the Commission designated five other gatekeepers under the DMA: Alphabet, Amazon, ByteDance, Meta and Microsoft.
In March, the executive opened non-compliance investigations into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari, and Meta’s “pay or consent model”.
In case of an infringement, companies face fines up to 10% of the gatekeeper’s total worldwide turnover.
