Apple accused of unfair competition as EU digital markets law bites

Apple has become the first company to breach EU digital markets law, due to its lack of support for alternative app providers.

The European Commission has officially adopted the preliminary opinion that the company’s App Store rules violate the law because they prevent app developers from freely directing consumers to alternative channels.

Apple has also launched a new non-compliance proceeding against Apple over concerns that its new contractual requirements for third-party app developers and app stores, including its new core technology fees, are also non-compliant with the DMA.

Under the DMA, Apple and other “very large online platforms” must allow app developers to direct consumers to offers outside of their app stores and allow them to make purchases for free.

But, according to the Commission, none of the company’s three sets of commercial terms allow developers to do so, with developers prohibited from providing pricing information in the app or communicating any other way with their customers to promote other offers.

Meanwhile, most commercial terms available to app developers allow driving only via “outbound links,” redirecting customers to a separate web page to enter into a contract.

And even if Apple is allowed to charge fees to help developers find a new customer, the Commission considers these fees to be excessive; for example, the company charges developers for each purchase of digital goods or services made by a user within seven days of a link from the app.

“Our preliminary position is that Apple does not fully allow steering. Steering is essential to ensure that app developers are less reliant on gatekeeper app stores and for consumers to be aware of the best offers,” said Margrethe Vestager, executive vice-president in charge of competition policy.

“We have also opened a case against Apple regarding so-called base technology fees and various rules allowing third-party app stores and sideloading. The developer community and consumers are eager to provide alternatives in the App Store.”

The non-compliance investigation focuses on Apple’s new contract terms for developers and whether they meet the DMA’s requirements of necessity and proportionality. This applies to the company’s core technology fee, under which developers of third-party app stores and third-party apps must pay a fee of €0.50 per installed app, as well as to the process that Users need to follow to download and install from app stores or alternative apps. on iPhones.

And he also worries about eligibility requirements for developers wanting to offer alternative app stores or distribute Web apps directly to iPhones, such as “membership in good standing” in Apple’s Developer Program.

If Apple is found to have violated the DMA’s requirements, the consequences could be serious. The Commission can impose fines of up to 10% of the gatekeeper’s total worldwide turnover. In the event of repeated infringements, this figure can reach 20%, with the Commission also able to take other measures, for example forcing the company to sell part of its activities or prohibiting it from acquiring additional services.

Apple has been contacted for comment.