In an unprecedented move powered by its new digital regulations, the European Union (EU) has charged Apple with hindering competition through its app store. The regulatory action by the European Commission falls under the provisions of the Digital Markets Act – a strict set of legislations formulated to dissolve the dominance of large tech firms and promote startups. The Financial Times first disclosed the EU’s legal action against Apple earlier this month.
In the event that Apple is held liable, it could be hit with fines capable of scaling up to 10% of its worldwide yearly revenue. Repeat offenses can even double this penalty to 20%, according to the European Union.
The commission aims to finalise its initial findings within a year of launching its official inquiry in March. The EU’s Internal Market Commissioner, Thierry Breton, has suggested that Apple should ‘act different’, reinforcing the EU’s determination to ensure their compliance with DMA regulations.
The executive branch of the bloc, the commission, also declared on Monday that it has initiated an investigation into a possible infringement of the bloc’s rules by Apple’s developer fees.
These charges involve a 50-cent fee per download that firms must cover if their app is utilised by over a million people. In its new investigation into developer fees, Brussels announced it would probe if Apple was imposing excessive barriers for users to download and install alternate app stores.
Regulators in the EU are wary about the restrictions that Apple places on developers’ freedom to “direct their customers”.
In an official statement, Apple maintained that a series of changes have been implemented to comply with DMA, following constructive feedback from developers and the European Commission. “We are confident that our plan is fully compliant with legal requirements and believe that over 99% of developers would incur the same or lower fees under the new business conditions we have established,” the tech giant stated.
As a bid to mitigate competition-related apprehensions, Apple instigated significant alterations to its iOS mobile software, app store, and Safari web browser in the EU in January. On Friday, Apple announced a delay in the launch of AI-powered features on iPhones within the EU, citing the unpredictability caused by incoming tech regulations.
Apple is facing intensified scrutiny from European Union regulatory authorities. This year, they were handed a €1.8bn penalty for hindering the competitive abilities of other music streaming platforms. Apple is currently challenging this imposed fine in the courts of EU. -Copyright The Financial Times Limited 2024.
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