European Union says Apple’s App Store violates digital competition rules

Apple

was notified by the European Commission in a ‘preliminary view’ that the “App Store rules prevent app developers from freely steering consumers to alternative channels for offers and content”.

It forms a new front in the growing tension between Brussels and the US internet giant on the European Union’s recently passed Digital Markets Act (DMA).

Due to “regulatory uncertainties” related to the DMA, Apple stated on Friday that it will postpone implementing newly announced AI capabilities in Europe. By requiring businesses to become more competitive throughout the EU’s 27 member states, the expansive rule aims to restrain the largest tech companies in the world, including Apple.

However, Apple views the new regulations as a serious threat to its walled garden and has publicly accused the DMA of putting customers’ privacy and security at greater risk. Under the new regulations, the commission has officially accused a tech company for the first time since it opened the first DMA investigations against Apple, Google, and Meta in March.

Following months of feedback from developers and the European Union regulator, Apple announced on Monday that it has made “a number of changes” to comply with the requirements and that it will “continue to listen and engage with the European Commission”.

Apple is now able to access the file comprising the commission’s inquiry and respond to its conclusions. By late March 2025, if the commission’s opinion is validated, a “non-compliance decision” will be adopted, paving way for punishment. The commission can fine a corporation up to 10 percent of its entire worldwide revenue, according to the new regulation. Relapse can increase this to as much as 20 percent.

As of September 2023, Apple’s total revenue is worth has $383 billion (or 358 billion euros). The European Union also has the right to break up companies, but only as a last resort.

What Digital Markets Act says

This was not the case, according to the findings of the commission, the European Union’s powerful competition regulator. The App Store has been at the centre of a long-running dispute with the European Union, even before the DMA entered into force this year. The commission in March hit Apple with a 1.8-billion-euro ($1.9 billion) fine after reaching similar conclusions in a probe launched in 2020 following a complaint from Swedish music streaming giant Spotify.

Apple has rejected the findings and it appealed the fine in the EU courts last month. “Without prejudice to Apple’s right of defence, we are determined to use the clear and effective DMA toolbox to swiftly bring to an end a saga which has already lasted for way too many years,” said the European Union’s top tech enforcer, Thierry Breton, according to news agencies.

The firm is also under investigation over whether it allows users to easily uninstall apps on its iOS operating system, and the design of the web browser choice screen. The DMA forces the biggest digital companies to offer choice screens for web browsers and search engines to give users more options.

Targeting Apple’s new core

Since Apple must now let third-party app stores in order to comply with the DMA, the commission launched a parallel inquiry into the company on Monday. Brussels said that it will examine the legality of the core technology fee, a new payment plan for those who create third-party app shops.

It will also look at whether downloading another app store requires certain actions that are compliant with the DMA. Breton said that Apple had been “squeezing out innovative companies and denying consumers new opportunities and choices for too long”.

However, the EU is not just focusing on Apple as a tech giant. Amazon, Meta, Microsoft, Alphabet, the parent company of Google, and ByteDance, the owner of TikTok, must likewise abide by the DMA.