European Union regulators have recently accused Apple of violating the Digital Markets Act (DMA), marking the first major breach of the new legislation aimed at curbing the dominance of big tech companies.
The DMA, which came into effect in 2023 to prevent monopolistic behavior by tech giants, requires 'gatekeepers' like Apple to allow app developers to communicate freely with their users and offer alternative purchasing options outside the gatekeeper's platform.
However, the European Commission's preliminary findings suggest that Apple's App Store rules do not comply with these requirements.
This picture taken on April 27, 2023 in Toulouse, southwestern France, shows a screen displaying the Apple logo and the European flag.LIONEL BONAVENTURE/AFP via Getty Images
Apple Has Breached DMA Rules: EU
According to the European Commission, Apple's App Store rules prevent developers from leading customers towards alternative app stores or purchasing options. This practice, the Commission argues, violates the DMA by not allowing developers to freely inform customers of cheaper alternatives.
EU Commissioner Thierry Breton emphasized, "We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA". Breton has more to say about Apple on social media.
“Act different” should be their new slogan🍏
For too long @Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.
Apple currently charges developers an average of 30% commission on App Store sales. Critics argue that this fee structure not only increases costs for developers but also stifles competition by making it difficult for alternative app marketplaces to thrive.
If Apple's practices are found to violate the DMA, the company could face fines of up to 10% of its global revenue. This could amount to billions of dollars, given Apple's substantial annual earnings.
The Commission has allowed Apple to review the preliminary findings and propose satisfactory changes to avoid these hefty fines.
In response, Apple has stated that it believes its practices comply with the law and has highlighted recent changes made to align with the DMA. "We estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created," Apple said in a statement.
The company also argued that users benefit from the strong security measures provided by the official App Store, a point the Commission is willing to discuss further.
Recent Investigations
Separately, the European Commission has launched a new investigation into Apple's recent contractual terms for third-party app developers. This probe focuses on Apple's "Core Technology Fee," which charges developers €0.50 for every app downloaded outside the App Store.
Additionally, the investigation will examine the steps required for users to download apps from alternative stores and whether Apple's eligibility criteria for alternative app store developers breach the DMA.
Margrethe Vestager, Executive Vice-President in charge of competition policy, remarked, "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".
