Apple has become the first US tech giant to be charged under the European Union’s tough new antitrust tech law — potentially exposing it to billions of dollars in fines for allegedly stifling developers in its App Store.
The iPhone maker has allegedly breached the EU’s Digital Markets Act by preventing app developers from easily steering customers to cheaper offers outside the App Store, the European Commission said Monday.
If confirmed to have breached the law, Apple could be fined up to 10% of its total worldwide revenue — a figure that could amount to tens of billions of dollars, as the company’s global revenue in 2023 totaled $383 billion.
“Under the DMA, developers distributing their apps via Apple’s App Store should be able, free of charge, to inform their customers of alternative cheaper purchasing possibilities, steer them to those offers and allow them to make purchases,” the agency said in a press release.
The case is already seen as a major test of the Digital Markets Act, which took effect in March and established new rules governing the behavior of Apple and a handful of other firms identified as the internet’s “gatekeepers.”
“We are concerned Apple’s new business model makes it too hard for app developers to operate as alternative marketplaces & reach their end users on iOS,” EU competition chief Margrethe Vestager wrote on X.
Vestager recently told CNBC that Apple has “very serious” non-compliance issues.
Apple was informed of the bloc’s preliminary findings and has the chance to defend its business practices. The commission said it will make a final decision on whether Apple is non-compliant by March 2025.
Apple pushed back on the charges, noting in a statement that it “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,” Apple said in a statement.
“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,” the statement added.
Apple and European officials have engaged in a lengthy battle over enforcement of the competition law.
Last week, Apple said it would delay launching three artificial intelligence features in Europe –including its flagship “Apple Intelligence” update for iPhones – because of the Digital Markets Act.
The company cited regulatory fears as well as concerns that rules requiring Apple to make software compatible with third parties would force it to compromise safety standards.
EU officials disclosed a new non-compliance probe focused on Apple’s contract terms for developers – including its practice of charging a “core technology fee” for access to its App Store.
The European Commission is also examining what it called the “multi-step user journey” for downloading alternative app stores on the iPhone, as well as the eligibility rules under which Apple allows developers to offer third-party app stores to customers.
The EU charges are the latest sign of a widening antitrust crackdown against Apple.
European regulators previously hit Apple with a $2 billion fine in March for “abusing a dominant position” in the digital music streaming market.
In the US, the Justice Department recently filed a landmark antitrust suit alleging Apple has engaged in anticompetitive behavior to ensure the dominance of its iPhone in the smartphone market.
With Post wires