Apple Inc. (AAPL.O) faces allegations from EU antitrust regulators that its App Store rules violate EU tech regulations by restricting app developers from steering consumers to alternative payment options, potentially leading to substantial fines for the tech giant, the European Commission announced on Monday.
This charge marks a significant step under the European Commission’s Digital Markets Act (DMA), aimed at curbing the dominance of major tech companies and ensuring fair competition for smaller players. The investigation, initiated in March, has now progressed to preliminary findings, with the Commission sending its concerns to Apple.
EU antitrust chief Margrethe Vestager highlighted concerns over Apple’s recent terms, stating that they hinder app developers’ ability to freely communicate with users and negotiate contracts directly. She emphasized that under Apple’s current terms, developers are primarily allowed to guide users to external websites (‘link-outs’) where transactions can occur, rather than directly within their apps.
Moreover, the Commission criticized Apple’s fees related to facilitating initial customer acquisitions through the App Store, suggesting they exceed what is necessary for such services.
Apple responded by asserting that it has implemented several adjustments over recent months to align with the DMA, incorporating feedback from developers and regulatory bodies. The company defended its approach, stating that the vast majority of developers would experience similar or reduced fee burdens under the new terms it has introduced.
In parallel to the ongoing investigation, the EU executive also announced a separate probe into Apple’s contractual obligations imposed on third-party app developers and app stores. This inquiry seeks to evaluate whether these requirements are justified and proportionate.
Breaches of the DMA can result in fines up to 10% of a company’s global annual turnover, underscoring the potential financial repercussions for Apple if found guilty.
The outcome of the investigations and subsequent decisions will be closely monitored by industry observers and stakeholders alike, as they could significantly impact the future regulatory landscape for tech giants operating within the EU market.
