could be forced to pay a fine of up to 10 percent of its global annual revenue following regulatory action by European Union officials. In the preliminary conclusions of his investigation, the block says the company violated the Digital Markets Act (DMA) rules by not allowing App Store developers to freely inform users about alternative payment options outside of Apple's ecosystem.
If Apple is found guilty, it could face a fine of tens of billions of dollars under the DMA's severe penalties. If a violation of the WFD is repeated, fines can reach up to 20 percent of global annual revenues.
The European Commission, the executive branch of the EU. From that start date, you have 12 months to finalize preliminary findings. This also marks the first regulatory action under the DMA, as grades.
The EC preliminarily concluded that Apple has violated the so-called anti-steering rules. Major technology companies that are subject to the DMA must allow third-party developers to inform users about alternative ways to make purchases without charging the developers to do so.
In their preliminary findings, officials determined that none of Apple allows developers to freely push customers toward alternative payment options. The EC notes that Apple does not allow developers to tell users how much less they could pay elsewhere.
Apple generally only allows developers to use links, the Commission said; In other words, they may include a link to a web page to make a payment. “The linking process is subject to various restrictions imposed by Apple that prevent app developers from communicating, promoting offers and entering into contracts through the distribution channel of their choice,” the EC said.
Regulators added that although Apple is entitled to receive payment for helping developers find new customers through the App Store, “the fees charged by Apple go beyond what is strictly necessary for such remuneration.” For example, they point out, developers have to pay Apple a fee for any purchases of digital goods or services someone makes within seven days of linking the app.
Developers must pay for any purchases made through the App Store (Google charges similar fees for Play Store purchases). As such, developers can offer consumers cheaper prices if they make purchases outside of the App Store.
In 2020, Epic Games reported fortnite players through the game's mobile apps who could pay less for V-Bucks by purchasing in-game currency. and they quickly pulled the game from their app markets, sparking legal battles that are still ongoing. However, thanks to the DMA, Epic plans to relaunch a mobile version of fortnite on the block later this year.
The EC also opened a new investigation into Apple for another possible violation of the DMA. The block has taken issue with the new fees Apple is charging developers “to access some of the new features enabled by the DMA,” such as the ability to offer a third-party app marketplace as well as app downloads. through other means. The EC notes that Apple still allows developers to continue operating under a previous agreement, which does not allow them to use alternative distribution channels.
Developers who sign up to the new terms are subject to what Apple calls a core technology fee. This is equivalent to a payment of €0.50 per user per year after the first million users. The fee, which applies even to downloads from third-party app markets. Many of Apple's rivals about the new terms (as well as about ).
The EC is also investigating whether Apple is making it too difficult for users to install third-party apps and marketplaces. The third part of the investigation concerns “eligibility requirements for developers related to the ability to offer alternative app stores or distribute apps directly from the web on iPhones,” such as the need to have a developer account in good standing.
Engadget has contacted Apple for comment.
The company recently found itself in trouble with the EU on a similar front: the bloc over violations of anti-steering rules. The Commission claimed that Apple prohibited third-party developers of music streaming apps from telling iOS users that they could pay less for subscriptions if they signed up outside of Apple's ecosystem.
Meanwhile, Apple said it was delaying the launch of Apple Intelligence (the company's name for a set of generative ai features that will debut in iOS 18) and some other features in the EU. “We are concerned that the DMA's interoperability requirements may force us to compromise the integrity of our products in ways that put user privacy and data security at risk,” the company said. Bloomberg.
