The European Commission (EC) is set to accuse tech giant Apple of breaching its Digital Markets Act (DMA), in a first-of-its-kind application of new regulations designed to temper the powers of big technology firms.
According to a report by the Financial Times, the EC has found that Apple has failed to comply with its duty to offer developers the option to direct customers to alternate offerings outside the App Store without charging a commission. The formal charges against Apple are expected to be announced in the coming weeks.
The ensuing allegations will be the first publicly voiced against a tech company under the DMA, a landmark piece of legislation aimed at forcing dominant tech corporations to provide space for competition in the EU markets. Importantly, the EC initiated investigations against Apple, along with Alphabet and Meta, based on the DMA’s provisions in March.
Regulators have stressed that these are preliminary findings; Apple can still adjust its activities, prompting a potential review of any final decisions by the EC. The timing of the formal allegations’ announcement may also shift.
If found to be in violation of the DMA, Apple could face daily fines for its non-compliance of up to 5% of its average daily turnover, currently exceeding $1 billion.
The EC’s actions come amid increased scrutiny on large tech firms for their market dominance by antitrust regulators worldwide. In the United States, Apple is facing an antitrust lawsuit initiated in March over its alleged use of its smartphone market stronghold to suppress competition and limit consumer choice. Additionally, Apple awaits a decision from a Californian federal judge regarding a lawsuit filed by Epic Games in 2020 over App Store policies.
In January, in an attempt to appease Brussels’ regulators, Apple announced unprecedented modifications for its iOS mobile software, App Store, and Safari web browser for its EU users. This move grants users the ability to access alternative app stores and download software from different sources, along with decreasing the App Store commission for digital goods and services from 30% to 15%.
However, Apple simultaneously imposed a new fee structure for app developers in Europe, including a “basic tech fee” of 50 cents per first-time user for developers with a user base exceeding 1 million, and a further 3% commission for companies utilizing Apple’s payment processing. Yet some developers say these changes may increase their costs, and sources claim that the EC may also lay charges regarding these new fees. Apple declined to comment.
Other tech giants might also face allegations from regulators. Specific cases in question include the EC’s ongoing investigations into whether Google favors its app store and if Meta uses personal data from Facebook users for targeted advertisements.
This post was last modified on 06/14/2024