The European Commission has told Apple that its App Store policies breach the Digital Markets Act, and the tech giant is set for huge daily fines as a result.
The EC, which enforces EU legislation, issued a statement this morning that says its preliminary findings show that Apple is preventing app developers from “freely steering consumers to alternative channels for offers and content.”
The EC also said it would be opening a new investigation into Apple’s App Store polices as it suspects that the new terms for developers looking to offer alternative payments and marketplaces “fall short of ensuring effective compliance”.
The Digital Markets Act came into effect in March this year, and is designed to force tech giants like Apple to open up digital marketplaces to fair competition. If the preliminary findings stick, Apple will be the first tech giant to fall foul of the new laws, and could be liable to daily fines of up to 10% of global annual revenue.
“Apple’s new slogan should be “act different”. Today we take further steps to ensure Apple complies with the DMA rules,” said the EC’s commissioner for internal market Thierry Breton. “We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA.”
“We are also opening a new case in relation to Apple’s new business terms for iOS,” he continued. “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.”
The EC’s executive vice president in charge of competition policy Margrethe Vestager added: “Our preliminary position is that Apple does not fully allow steering. Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers.”
“We have also opened proceedings against Apple in relation to its so-called core technology fee and various rules for allowing third party app stores and sideloading,” she continued. “The developers’ community and consumers are eager to offer alternatives to the App Store. We will investigate to ensure Apple does not undermine these efforts.”
In January, Apple introduced new App Store terms for EU developers who would like to offer alternative payments and run alternative marketplaces on iOS. The new terms were designed to comply with the EU’s DMA laws, and introduced a new Runtime Fee-style Core Technology Fee, which charges developers per install.
The policies caused a storm of criticism, with Epic Games boss Tim Sweeney and a raft of execs in the mobile business offering strong condemnation of Apple’s behaviour.
