Apple has now officially become the first company to be charged with breaching the Digital Markets Act (DMA). EU regulators concluded that the platform holder prevents third-party developers from steering users to alternative app stores.
In a press release on June 24, the European Commission announced that it had informed Apple of its preliminary findings that App Store rules “prevent app developers from freely steering consumers to alternative channels for offers and content.”
It is a breach of the DMA, which requires Apple and other “gatekeepers” to allow third-party devs to inform their customers of other purchasing options free of charge.
According to the regulators, the App Store’s business terms allow steering only through “link-outs” (using in-app links to redirect users to a separate web page). Another issue is that Apple “charges developers a fee for every purchase of digital goods or services a user makes within seven days after a link-out from the app.”
If these preliminary views were to be confirmed, the Commission would adopt a non-compliance decision by March 25, 2025, or within 12 months from the opening of proceedings.
“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 told Reuters.
As we reported last week, if found guilty, Apple faces daily non-compliance fines of up to 5% of its average daily worldwide turnover. Given that is now around $1 billion, daily penalties could reach $50 million.
The European Commission also launched a new investigation into Apple over concerns that its new contract terms for third-party developers and app stores don’t comply with the company’s obligations under the DMA.
“The developers’ community and consumers are eager to offer alternatives to the App Store,” the European Commission’s executive VP in charge of competition policy Margrethe Vestager said in a statement. “We will investigate to ensure Apple does not undermine these efforts.”