Apple, the tech giant best known for its lineup of iPhone and MacBook products, is the first technology company to be charged with violating the European Union’s Digital Markets Act (DMA), a law that the European Parliament adopted in 2022 to make the markets in the digital sector fairer and more contestable, according to a new press release that surfaced on the official European Commission website today. As explained by the commission, the DMA dictates that developers distributing their apps via Apple’s App Store should be able to, free of charge, inform their customers of alternative cheaper purchasing possibilities, steer them to those offers, and allow them to make purchases, but Apple has apparently failed to meet these rules.
The commission on its problems with Apple and its business terms:
- “None of these business terms allow developers to freely steer their customers. For example, developers cannot provide pricing information within the app or communicate in any other way with their customers to promote offers available on alternative distribution channels.”
- “Under most of the business terms available to app developers, Apple allows steering only through “link-outs”, i.e., app developers can include a link in their app that redirects the customer to a web page where the customer can conclude a contract. The link-out process is subject to several restrictions imposed by Apple that prevent app developers from communicating, promoting offers and concluding contracts through the distribution channel of their choice.”
- “Whilst Apple can receive a fee for facilitating via the AppStore the initial acquisition of a new customer by developers, the fees charged by Apple go beyond what is strictly necessary for such remuneration. For example, Apple charges developers a fee for every purchase of digital goods or services a user makes within seven days after a link-out from the app.”
A word from Thierry Breton, commissioner:
“Act different” should be their new slogan🍏
— Thierry Breton (@ThierryBreton) June 24, 2024
For too long @Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.
Today we are taking further steps to ensure AppStore & iOS comply with #DMA pic.twitter.com/e741oV9r9l
As for what Apple might have to pay:
In case of an infringement, the Commission can impose fines up to 10% of the gatekeeper’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringements. Moreover, in case of systematic infringements, the Commission is also empowered to adopt additional remedies such as obliging a gatekeeper to sell a business or parts of it, or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance.