Digital Markets Act: EU vs Apple

Apple is the first major tech company to face charges under the DMA rules and could be fined up to 10% of its annual global revenue, amounting to $38 billion based on 2023 figures

Image credit: Image Creator from Microsoft Designer/DALL.E and Canva

The European Commission recently informed Apple of its preliminary view that Apple's App Store rules breach the Digital Markets Act (DMA) by restricting app developers from directing consumers to alternative purchasing options.

The Commission also initiated a new investigation into Apple's contractual requirements for third-party app developers, including the "Core Technology Fee," to ensure they comply with the DMA.

Preliminary findings on App Store rules:

• Apple's business terms restrict developers from informing customers about cheaper alternatives and promoting offers outside the App Store.

• Apple only allows "link-outs" to external websites under strict conditions, hindering developers' ability to freely communicate with customers.

• Apple charges fees beyond what is necessary, including for purchases made within seven days of a link-out.

If confirmed, these findings would mean Apple's terms violate Article 5(4) of the DMA, which mandates free steering to alternative offers.

New investigation on contract terms:

• The Commission will examine if Apple's new terms for accessing features like alternative app stores comply with Article 6(4) of the DMA.

• This includes assessing the €0.50 "Core Technology Fee" per installed app, the user steps for installing alternative stores or apps, and the eligibility criteria for developers.

Under the DMA, “gatekeepers” like Apple, Alphabet, Amazon, ByteDance, Meta, and Microsoft must allow free consumer steering to external offers. Apple, the first company charged under these rules, could face fines up to 10% of its annual global revenue, potentially $38 billion based on 2023 figures, increasing to 20% for repeat offenses. Apple has until March 2025 to respond to the Commission’s assessment.

Apple was previously fined €1.84 billion (approximately $2 billion) by the EU’s antitrust regulators for the App Store’s anti-steering practices in a case that predates the DMA. This fine resulted from a 2020 lawsuit initiated after Spotify filed an antitrust complaint.