- Cupertino-based Apple becomes the first company to be charged with violating EU’s DMA anti-competitive laws
- It comes after Apple has been keeping developers from using alternative payment methods for apps on-board the App Store
- Apple says it will defend the charges failing which, the company could have to pay up to 10% of the global revenue or $38 billion as per last year’s numbers
In the latest move by the European Union, it has fined Apple for infringing its landmark Digital Markets Act as a part of its preliminary ruling passed on Monday. The European Commission, which is assessing Apple’s practices and business models for the European Union, is investigating Apple for its anti-steering policies that could land Apple in a fine of up to 10% of its global revenue. For reference, this number could go as high as $38 billion as per last year’s numbers.
EU slaps Apple with preliminary findings violating Digital Markets Act
According to the EU, Apple doesn’t allow full steering, a key process that ensures app developers can be less dependent on proprietary app stores aka ‘gatekeepers’. This allows consumers to get the best offers on initial and in-app purchases with competitive rates.
As per DMA that deemed Amazon, Apple, Alphabet, ByteDance, Microsoft, and Meta as six gatekeepers or monopolizing powers, companies should allow app developers to list ways to pay for purchases. Not just from the app store but also from the web via third-party payment processors.
In the case of Apple, the Cupertino-based giant has been found violating these steering policies by offering ‘link-outs’ as the only way for consumers to know they can pay outside the App Store. The EU has been investigating Apple for a few months notifying them about the various changes to make to stay compliant in Europe to which, Apple has agreed to a few things as of now.
Infringing the DMA rules could end up Apple in a fine of as much as 10% of its annual global revenue and the number is ridiculously high at $38 billion as per last year’s figures. Repeated offenders attract a 20% additional fine on top of the above-mentioned numbers.
Apple currently has time till March 2025 to respond to the claims made by the EU and alter its business models. This allows app developers to inform their consumers about ways they can pay for app purchases both in the App Store and outside.
Apple Core Technology Fees Under Radar Too
Perhaps, that’s not the only claim made by the EU. The authorities have opened other proceedings regarding Apple’s support for alternative app stores under the latest Digital Markets Act.
Apple has been charging alternative app stores a Core Technology Fee along with guiding the users through a strenuous multistep process before they could install apps from third-party app stores. It is also making it difficult for app developers to offer such services citing eligibility that they must have to allow such a practice.
Apple claims compliance with DMA rules is putting uncertainty on some of its major rollouts such as the latest on Apple Intelligence not being a part of devices sold in the EU. This would mean opening the features for Android and other OSes potentially risking users’ data security and privacy.
