“Steering is key to ensuring app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers,” wrote Margrethe Vestager, E.U. executive vice president in charge of competition policy.
The E.U. will make its final determination on the case by March 2025, with the option to fine Apple as much as 10 percent of its worldwide revenue. Apple, which booked $383.3 billion in revenue in fiscal 2023, said it would continue to listen and engage with the European Commission.
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The allegations represent the latest in a string of regulatory challenges facing Apple, as governments worldwide scrutinize the company’s use of its massive market power.
In March, the Justice Department and the attorneys generals of 15 states and the District of Columbia sued Apple, accusing the company of breaking federal antitrust law. Because the case revolves around similar issues raised by E.U. regulators, antitrust experts say their findings against Apple could bolster U.S. prosecutors’ case.
Separately in March, the E.U. fined Apple nearly $2 billion for “abusing” its control over music streaming services by quashing competition through its app store, in response to an antitrust complaint filed by rival Spotify.
Apple has been neck-and-neck with AI chipmaker Nvidia and Microsoft in the ranks of the world’s most valuable company, with the three all rotating through the top spot in recent weeks. On Monday, Apple’s market cap hovered near $3.2 trillion.
Experts said the accusation from the European Commission signals that regulators are serious about forcing Apple to open up its app store to meaningful competition. Apple’s current fee structure won’t be enough to satisfy regulators, said Gene Kimmelman, who served as the Justice Department’s deputy associate attorney general in the early parts of the Biden administration.
“European regulators have made it clear that Apple must totally revamp and possibly eliminate most of the fees imposed on developers and those seeking to open competitive app stores,” Kimmelman said.
The E.U. took issue with several policies that Apple applies to app developers, such as preventing them from providing pricing information within its app or promoting certain offers. They also flagged rules applied to linking customers to other apps, as well as certain fees that Apple charges.
The accusations come four months after the E.U. opened an investigation that focused on steering rules by Apple and Alphabet.
Apple said in a statement that it has made a number of changes in recent months after getting feedback from developers and European regulators. The company said all developers doing business in the E.U. on the app store can use new capabilities from the company, including the ability to direct users to the web at a competitive rate.
“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,” the company said in a statement.
Rebecca Haw Allensworth, a law professor at Vanderbilt Law School, said that Monday’s announcement reflects the ongoing process of E.U. regulators figuring out the details of how the DMA will be interpreted and applied.
“This period now is where we’ll be figuring out exactly what it means,” she said. “There has to be some interpretive back and forth.”
The E.U. also said it opened a new probe into Apple’s contractual terms with developers. Specifically, it is looking into a fee of half a euro (about 54 cents), which developers must pay for each installed app, and an Apple membership program for developers. It is also probing the “multistep user journey” required to download and install an alternative app store on iPhones.
Shira Ovide contributed to this report.