Excerpt from Financial Express Article, Published on June 25, 2024
Apple has become the first major tech company to be charged with violating the European Union’s Digital Markets Act (DMA). EU regulators announced that Apple’s App Store policies appear to contravene the DMA’s competition-encouraging provisions.
On Monday, regulators expressed concerns that Apple’s new business model impedes app developers from operating alternative marketplaces and reaching iOS users. “Today we open a new case and adopt preliminary findings against Apple under the DMA. We are concerned Apple’s new business model makes it too hard for app developers to operate as alternative marketplaces and reach their end users on iOS,” Margrethe Vestager, head of competition policy in Europe, posted on X.
The concept of “steering,” which allows app developers to guide consumers to alternative app stores, is central to the issue. Regulators believe Apple restricts this practice, thus breaching the DMA. “Our preliminary position is that Apple does not fully allow steering,” Vestager explained, according to The Verge.
The European Commission has also launched a new investigation into Apple’s support for alternative iOS marketplaces in Europe, including scrutiny of the fees it charges developers for core technologies.
The DMA mandates that gatekeepers like Apple must permit app developers to direct consumers to offers outside their app stores at no cost. Alongside Apple, other tech giants such as Alphabet, Amazon, ByteDance, Meta, and Microsoft are required to comply with these rules by March 2024.
Previously, Apple was fined €1.84 billion (approximately $2 billion) by the EU’s antitrust regulators over anti-steering practices related to a case initiated by Spotify in 2020. This fine predates the DMA.
In response to the preliminary findings, Apple spokesperson Peter Ajemian stated, “Throughout the past several months, Apple has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission.”
Apple now has time to respond to the European Commission’s preliminary assessment before a final ruling is issued, expected by March 2025. If found guilty of infringement, Apple could face fines of up to 10 percent of its annual global revenue, potentially $38 billion based on last year’s figures, with the penalty doubling for repeat offenses.
To delve deeper into this topic, please read the full article on Financial Express