The European Commission said Monday that it made a preliminary decision that Apple breached the EU’s Digital Markets Act. Apple’s rules “prevent [iPhone] app developers from freely steering consumers to alternative channels for offers and content,” according to the EC.
The commission also said it started an investigation into whether Apple’s new Core Technology Fee complies with the DMA. If Apple doesn’t change its policies, the EC could levy extremely heavy fines.
EU accuses Apple of breaking DMA ‘steering’ rules
The purpose of the European Union’s Digital Markets Act is to open up Big Tech to more competition. But Apple seems to be dragging its feet. Under the DMA, third-party iPhone applications are allowed to inform customers that they can save money by buying services directly from the developer, as opposed to in-app purchases. But the EC’s investigation found that the only way developers can communicate to customers via their application is with a link to their website.
“Developers cannot provide pricing information within the app or communicate in any other way with their customers to promote offers available on alternative distribution channels,” according to the commission’s report, released Monday.
And if a customer follows a link to the developer’s website, Apple charges the developer a fee for every purchase that customer makes for the next week. Note that these rules apply only in the European Union. In the rest of the world, third-party iPhone software developers are blocked from using their apps to suggest that customers visit their websites to buy services or extra features.
It’s a warning
The preliminary findings of the European Commission are the first stage in a year-long process of enforcing the Digital Markets Act. Apple has the right to write a response arguing that it is in compliance. And it can change its steering policies at any time.
But Monday’s accusation is one Apple must take seriously, as fines are potentially huge. “In the case the Commission finds an infringement of the DMA, it can impose fines of up to 10% of the company’s total worldwide turnover, or up to 20% in case of repeated infringement,” warns the EC.
EU also takes aim at Apple’s Core Technology Fee
When the DMA went into effect, part of Apple’s response was to institute a Core Technology Fee. This requires developers to pay Apple half a euro each time an application is installed on an iPhone. It exempts freeware, but is intended to bring in revenue from Facebook, YouTube and other apps that are free but earn their developers billions.
But Apple’s Core Technology Fee is proving controversial.
“The Commission opened a new non-compliance procedure against Apple over concerns that its new contractual requirements for third-party app developers and app stores, including Apple’s new ‘Core Technology Fee,’ fall short of ensuring effective compliance with Apple’s obligations under the DMA,” the EC said Monday.
Apple isn’t being singled out. The EU is also investigating Alphabet/Google and Meta/Facebook for not complying with provisions of the DMA. And the iPhone-maker could hit back. It announced Friday that its recently announced artificial intelligence capabilities are not coming to Europe because of the DMA.
Ed Hardy has been writing full-time about tech for 25 years, and using it for much longer than that. His intro to Apple was a Macintosh Classic II (which he still has), but now he uses a 13-inch iPad Pro as his primary computer. He’s written for NotebookReview, TabletPCReview, and Brighthand, as well as other sites.
