EU authorities have announced that Apple’s guidelines for the App Store violate regulations concerning technology in the EU.
On Monday, European Union officials asserted that Apple’s policies within the App Store are not in accordance with expansive new regulations in the tech sector. The European Commission, which serves as the executive body of the EU, has also initiated a fresh investigation into Apple regarding recent contractual terms established with developers. This inquiry falls under the Digital Markets Act (DMA), a significant legislation that aims to curb the dominance of major tech corporations. A key point of focus in the investigation has been the anti-steering rules. According to the DMA, tech companies are prohibited from prohibiting businesses from informing their customers about cheaper alternatives to their products or subscriptions available outside of the app store.
In their preliminary conclusions, regulators have declared that Apple is in violation of the DMA due to its App Store regulations hindering app developers from guiding consumers towards other platforms for offers and content. Apple has been contacted for a statement in response to these findings. The current system employed by Apple allows steering through a link that redirects users to a webpage where they can make purchases, such as subscriptions. However, the Commission highlighted that Apple imposes various restrictions that limit app developers in their communication, promotional activities, and contract agreements through their preferred distribution channels.
Furthermore, authorities pointed out that the fees Apple imposes on developers for acquiring new customers through the App Store exceed what is considered “strictly necessary.” The Commission has not disclosed the specific criteria for determining a necessary fee. If found guilty of breaching the DMA, Apple could face fines amounting to up to 10% of its total annual turnover worldwide. Earlier this year, Apple faced a 1.8 billion euro ($1.93 billion) antitrust penalty from EU regulators for exploiting its dominant position in the music streaming app market.
Additional EU Investigation under DMA
Apple implemented significant changes to its App Store operations in the EU ahead of the DMA implementation. The company now permits app downloads from external websites and third-party app stores on its devices. Despite these adjustments, the Commission has raised concerns regarding certain practices adopted by Apple. Notably, Apple still enforces a “core technology fee” of 50 euro cents ($0.54) per app installation for downloads originating outside its official App Store. The Commission is scrutinizing whether this fee aligns with the DMA regulations.
Regulators are also examining the processes Apple mandates users to follow for downloading alternative app stores or applications to ensure compliance with EU regulations. Additionally, the Commission will assess the eligibility criteria associated with offering alternative app stores or direct app distribution from the web on iPhones to ascertain compliance with the tech legislation.
[source: CNBC – EU regulators accuse Apple of breaching tech rules in App Store regulations]
