The European Commission has alleged Apple is in breach of its Digital Markets Act (DMA), in a new report that outlines anti-competitive behaviour in the consumer market. The Commission states a preliminary view that Apple’s App Store rules “prevent app developers from freely steering consumers to alternative channels for offers and content.”
It has further alleged Apple is in non-compliance of the DMA through its contractual requirements and “Core Technology Fee” for third-party app developers and App Stores. The issue, as presented by the European Commission, is that developers are not able to freely steer their customers, as Apple only allows steering through link-outs, and that Apple is allegedly charging fees “beyond what is strictly necessary.”
Essentially, the EC alleges Apple is skirting DMA requirements by stifling competition, as well as over-charging developers.
What is the Digital Markets Act?
The Digital Markets Act was established in 2022, with a view to create a fairer market for all businesses, and to reduce monopoly powers in the digital marketplace. Since its introduction, companies have been required to make internal changes to operate within the EU, and follow compliance rules to ensure their businesses practices are not anti-competitive.
Read: Apple hit with US antitrust lawsuit over alleged smartphone monopoly
Per the European Commission, Apple has not done enough to comply with the DMA, and a set March 2024 deadline for change has now passed. It will give Apple a chance to defend its finding before judgement is handed down – but if the company’s defence does not pass, the Commission will “adopt a non-compliance decision” within the 12 months following March 2024.
“Apple’s new slogan should be ‘act different’. Today we take further steps to ensure Apple complies with the DMA rules,” Thierry Breton, Commissioner for Internal Market said of the preliminary findings. “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.”
Should the European Commission find Apple in breach of its rulings, the company could face a significant fine of “up to 10% of the gatekeeper’s total worldwide turnover.” Repeated infringements could also mean an increased fine of up to 20%, or in drastic cases, “additional remedies” that may include an obligation to sell off a business, or parts of one. We’re likely to see more from the European Commission’s ruling in the coming months.
