The European Union regulators have recently accused Apple of violating new tech rules. These rules, under the Digital Markets Act (DMA), prohibit tech companies from preventing businesses from informing their users about cheaper alternatives to their products. One of the areas of focus in the investigation is Apple’s anti-steering rules, which do not allow app developers to direct consumers to alternative channels for offers and content. The regulators argue that Apple’s App Store rules hinder developers from freely steering consumers to other purchasing options.
Restrictions Imposed by Apple
The Commission noted that while Apple does allow steering through a link that directs users to a webpage where they can make purchases, there are numerous restrictions in place. These restrictions prevent app developers from effectively communicating, promoting offers, and concluding contracts through the distribution channels of their choice. The fees that Apple charges developers for acquiring new customers via the App Store were also scrutinized, with regulators suggesting that these fees exceed what is strictly necessary.
If Apple is found to be in breach of the DMA, it could face fines of up to 10% of its total worldwide annual turnover. This would amount to a significant penalty for the U.S. tech giant. Earlier this year, Apple was hit with a 1.8 billion euro antitrust fine for abusing its dominant position in the market for the distribution of music streaming apps. The steering rules, which were also a focus in that investigation, have once again come under scrutiny.
In anticipation of the DMA, Apple has made some adjustments to its App Store policies in the EU. For example, it now allows apps to be downloaded from websites and third-party app stores on its devices. However, the Commission has raised concerns about certain practices, such as Apple’s continued imposition of a “core technology fee” for downloads outside of its App Store. Regulators are evaluating whether these practices comply with the DMA.
Regulators are also looking into the steps that Apple requires users to take in order to download alternative app stores or apps. The Commission will assess whether the eligibility requirements related to offering alternative app stores or distributing apps directly from the web on iPhones align with the regulations set forth in the tech law. Apple’s compliance with these rules will be closely monitored as the investigation progresses.
Apple’s violation of the new tech rules set by the European Commission has raised concerns about the tech giant’s practices in the digital market. The outcome of the investigation will determine the extent of Apple’s breach and the potential consequences it may face. As the regulatory landscape evolves, tech companies must adapt their policies to ensure compliance with the law. Apple’s response to these allegations will be crucial in shaping its future interactions with developers and consumers alike.