Apple faces another probe after charged with breaching EU tech rules

European Union antitrust regulators accused Apple of violating the bloc’s technology regulations. This allegation could result in a substantial fine for the iPhone manufacturer, which is also under investigation for new fees imposed on app developers.

The European Commission, which serves as the EU’s antitrust and technology regulator, announced that it had forwarded its preliminary findings to Apple after an investigation initiated in March.

The Commission’s initial accusation against Apple is the first under its groundbreaking Digital Markets Act, which aims to limit Big Tech’s influence and guarantee a level playing field for smaller competitors. A final decision must be made by March of the following year.

DMA violations may result in a fine of up to 10% of a company’s global annual turnover.

Margrethe Vestager, the EU’s antitrust director, criticized Apple’s revised terms for failing to adhere to the DMA. Apple may avoid a fine by amending its business terms to resolve the concerns.

“In their current state, we believe that these new terms do not permit app developers to communicate freely with their end users or to enter into contracts with them,” she stated at a conference.

She stated that Apple was responsible for determining how to comply with the DMA, and she was not permitted to dictate the company’s actions.

Apple stated that it had implemented numerous modifications in recent months to ensure compliance with the DMA, following feedback from the Commission and app developers.

In an email, it stated, “We will persist in our attentive listening and constructive dialogue with the European Commission, as we have consistently done.”

The Commission stated that Apple permits steering solely through “link-outs” in most business conditions. This means that app developers may incorporate a link into their application that directs the user to a web page where they can execute a contract.

It also criticized the fees that Apple imposed for facilitating the initial acquisition of a new consumer by developers through the App Store, arguing that they exceeded the minimum required for such compensation.

“We are confident that our plan is in compliance with the law and anticipate that over 99% of developers would pay the same or less in fees to Apple under the new business terms we have established,” Apple stated in its email.

Additional contractual obligations

The EU executive also announced that it would investigate the iPhone manufacturer regarding its new contractual obligations for third-party app developers and app stores and whether they were both proportionate and necessary.

The issues are the core technology fee, the multi-step user journey to acquire and install alternative app stores on iPhones, and the eligibility requirements for developers to offer alternative app stores or directly distribute apps from the web on iPhones.

In March, Apple implemented new fees in the European Union that include the core technology charge for significant app developers, regardless of whether they utilize any of its payment services. This decision drew criticism from Epic Games, the creator of Fortnite, and other groups.

Vestager also criticized Apple’s announcement last week that it would postpone the introduction of its AI-powered features in the EU, which the company attributed to the DMA. According to Vestager, Apple’s AI integration appeared to be anti-competitive.

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