EU Finds Apple In Breach Of DMA Competition Rules

Apple is in violation of the EU’s new Digital Markets Act competition rules, EU regulators said on Monday, the first time a company has been charged with infringing the DMA.

The European Commission said it believes the firm’s App Store rules governing developers’ communications with users are not compatible with the DMA.

Apple said it is “confident our plan complies with the law”.

The Commission’s findings are preliminary, and Apple has been given an opportunity to review them and advance proposals for satisfying the Commission.

App distribution

The firm faces fines of up to 10 percent of its global revenues if it fails to comply with the DMA.

The rules, passed in 2022, came into effect earlier this year and are designed to force the largest tech “gatekeepers” to allow more competition.

But they are as yet unproven, and companies can challenge the Commission’s decisions in court.

The rules oblige companies such as Apple to allow users to download apps from alternative sources, such as the web or alternative app stores, similar to a desktop platform.

And developers using Apple’s own App Store must be allowed to offer third-party payment methods and to communicate freely with their users about those methods.

The company charges commissions averaging 30 percent on payments from users to developers, which it says are justified by the large user base to which it provides access.

Apple announced a compliance plan in January that allowed broader communications options and third-party app stores, but angered developers by introducing new fees, such as a “core technology fee” of 50 euro cents (42p) per download after it has been downloaded one million times or more within 12 months.

Compliance plan

The company made further changes in March.

The Commission on Monday found the company’s plans had not gone far enough.

“We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA,” said EU industry commissioner Thierry Breton.

The Commission said it believes Apple’s fees “go beyond what is strictly necessary”.

Apple said more than 99 percent of developers would pay “the same or less” in fees to under its new business terms.

“All developers doing business in the EU on the App Store have the opportunity to utilise the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate,” the company said.

Separately, the Commission opened a new investigation into Apple’s new contractual terms for developers, focusing on a charge of 50 euro cents for every app download outside of Apple’s App Store, the number of steps for users who want to download apps from alternative stores and the eligibility criteria for alternative app stores.

Meta is also expected to be found to have infringed the DMA before the August break.