Apple’s EU App Store in breach of Digital Markets Act over three key issues, company remains defiant
Apple says that it is confident its plan to introduce alternative app marketplaces to iOS 17 in the EU complies with the law, following an announcement the European Commission has found Apple to be in breach of its Digital Markets Act.
Early Monday, the EC stated that it “has informed Apple of its preliminary view that its App Store rules are in breach of the Digital Markets Act (DMA), as they prevent app developers from freely steering consumers to alternative channels for offers and content.”
Defiant, Apple says “We are confident our plan complies with the law” and claims that 99% of developers pay “the same or less in fees” to Apple under its new business terms. It follows months of machinations and sweeping changes made to iPhone in the bloc, including the introduction of alternative app stores like Setapp, as well as alternative methods of making payments in apps.
EU readies another hammer blow
In its preliminary findings, to which Apple may now respond in defense, the EC says three of Apple’s main business terms mean that developers are not allowed to freely steer their customers to alternative methods of payment and that the fees charged by Apple “go beyond what is strictly necessary for such remuneration.”
The EU specifically highlighted Apple’s controversial core technology fee, which charges developers a €0.50 fee on app and third-party app installs after the first million. The Commission “will investigate whether Apple has demonstrated that the fee structure that it has imposed, as part of the new business terms, and in particular the Core Technology Fee, effectively complies with the DMA.”
The two further sticking points are Apple’s “multi-step user journey to download and install alternative app stores or apps on iPhones” and the eligibility requirements for developers who want to offer alternative app stores or web apps, including Apple’s stipulation they must have “membership of good standing” in the Apple Developer Program.
In a statement to iMore Apple said “Throughout the past several months, Apple has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission. We are confident our plan complies with the law, and estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created.” It continued, “All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate. As we have done routinely, we will continue to listen and engage with the European Commission.”
The company also highlighted some of the extra steps it has taken since first taking up the DMA’s rule changes, such as expanding app distribution to sideloading apps directly from the web and exempting non-commercial developers from the Core Technology fee.
The EU could adopt a non-compliance decision within 12 months of today’s preliminary findings. If Apple can’t figure out compliance, or can’t convince the EU it’s wrong, it could face a fine “up to 10% of the gatekeeper’s total worldwide turnover,” or up to 20% in the case of repeated infringements.
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