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regular-article-logo Wednesday, 03 July 2024

EU targets Apple's App Store for first time with charges under Digital Markets Act

The European Commission said that according to the preliminary findings of its investigation, the restrictions that the iPhone maker imposes on developers using its mobile App Store had breached the 27-nation bloc’s Digital Markets Act

AP/PTI London Published 25.06.24, 04:58 AM
Representational image

Representational image File image

EU regulators on Monday levelled their first charges under the bloc’s new digital competition rulebook, accusing Apple of preventing app makers from pointing users to cheaper options outside its App Store.

The European Commission said that according to the preliminary findings of its investigation, the restrictions that the iPhone maker imposes on developers using its mobile App Store had breached the 27-nation bloc’s Digital Markets Act.

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The rulebook, also known as the DMA, is a sweeping set of regulations aimed at preventing tech “gatekeepers” from cornering digital markets under threat of heavy financial penalties. The commission opened an initial round of investigations after it took effect in March, including a separate ongoing probe into whether Apple is doing enough to allow iPhone users to easily change web browsers, and other cases involving Google and Meta.

Apple has been facing pressure on both sides of the Atlantic to tear down some of the competitive barriers around its lucrative iPhone franchise. The US justice department has filed a sweeping antitrust lawsuit against Apple this year, accusing it of illegally monopolising the smartphone market and boxing out competitors, stifling innovation and keeping prices artificially high.

App makers such as Spotify had complained for years about Apple’s requirement that subscriptions only be bought through iOS apps, allowing the company to take a commission of up to 30%.

Under the DMA’s provisions, app developers must be allowed to inform customers of cheaper purchasing options and direct them to those offers.

The commission, the bloc’s executive arm, said App Store rules “prevent app developers from freely steering consumers to alternative channels for offers and content.”

Apple now has a chance to respond to the findings. The commission must make a final decision on Apple’s compliance by March 2025. The company could face fines worth up to 10 per cent of its global revenue, which could amount to billions of euros.

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