The European Commission has published preliminary findings that accuse Apple of breaching the Digital Markets Act (DMA) by preventing developers from telling customers about options outside the App Store.
The Commission – part of the executive arm of the European Union – also opened a separate investigation into Apple’s new contractual terms and developer fees it was imposing as part of its efforts to comply with the DMA.
In its preliminary findings, the Commission said Apple’s business rules for app developers fail to comply with the DMA’s requirements to allow developers to steer users towards options outside the Apple environment, which might be cheaper or otherwise more beneficial.
The Register has asked Apple to comment.
The Commission said today that its findings show Apple ensured developers couldn’t provide pricing information within the app or communicate in any other way with their customers to promote offers available on alternative distribution channels.
Although Apple allows developers to direct users to other options through “link-outs,” which redirect customers to a webpage to conclude contracts, but the EC’s early findings say this isn’t enough. According to the EC, Apple restricts link-outs to prevent developers from communicating with customers, promoting offers, or concluding contracts through their preferred distribution channels. Fees charged by Apple for link-outs were also more than strictly necessary, it alleged.
If the Commission’s preliminary findings were confirmed, it would find Apple non-compliant within 12 months from the opening of proceedings on March 25.
“Apple’s new slogan should be ‘act different’,” said Thierry Breton, commissioner for Internal Market. “We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA. We are also opening a new case in relation to Apple’s new business terms for iOS. Without prejudice to Apple’s right of defence, we are determined to use the clear and effective DMA toolbox to finally open real opportunities for innovators and for consumers.”
Apple could face fines of up to 10 percent of its global annual revenue if it fails to comply, meaning penalties could run into the tens of billions of dollars.
The Digital Markets Act, which came into force earlier this year, designates Alphabet (Google), Amazon, Apple, ByteDance, Meta (Facebook), and Microsoft as tech’s six main gatekeepers who have special status under the law, which prevents them from dictating the price or conditions business users apply to the same products or services they offer via their platform.
The Commission’s new investigation alleges Apple’s new terms for accessing features enabled by the DMA may not comply with the law and also notes the old conditions are still available.
The new conditions include a €0.50 technology installation fee, a multi-step user journey to download and install alternative app stores or apps on iPhones, and eligibility requirements for developers related to the ability to offer alternative app stores or directly distribute apps from the web on iPhones.
The Commission said it would also continue to investigate the checks and reviews Apple puts in place to validate apps and alternative app stores to be sideloaded.
The news comes just days after Apple announced a delay in its plans to deploy artificial intelligence features in Europe because the American giant is concerned with the continent’s privacy regulations.
Last week, a report from the Open Web Advocacy (OWA) – an international developer-focused group set up to educate politicians on technical details – claimed Apple has failed to comply with DMA and has done so in ways that make life as painful as possible for competitors.
“Apple is using every tool at its disposal to dissuade developers from leaving their app store and to undermine the goals of the DMA,” argued the report, which spans more than 100 pages. ®