EU Says Apple Broke DMA Rules, Deepens Probe

The European Commission on Monday said it had informed Apple that its App Store rules run afoul of the Digital Markets Act (DMA), saying the store prevents app developers from freely steering customers to alternatives. The EU will also deepen its probe to include scrutiny of the company’s iOS terms and fees for developers.

The latest move comes after the EU announced a probe into Apple, Google parent Alphabet, and Amazon in March -- the giants were designated as “gatekeepers” by the commission and subject to increased scrutiny under the DMA, which went into full force on March 7. Fines could reach up to 10% of a company’s global turnover. With global net sales of $383.29 billion in 2023, Apple could face a fine reaching into the billions.

“Apple’s new slogan should be ‘act different,’” Thierry Breton, EU commissioner for internal market, said in a release. “Today we take further steps to ensure Apple complies with the DMA rules.”

Margrethe Vestager, the commission’s executive vice president in charge of competition policy, said “steering” was core to the EU’s charges. “Today is a very important day for the effective enforcement of the DMA … 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.”

Related:US Lawmakers Urge Pushback on EU’s Big Tech Crackdown

Probe Deepens to Include iOS Developer Terms

The commission also announced that it would also open a probe into Apple’s new business terms for iOS, including its core technology fee, whether it hinders users’ ability to easily install alternative app stores or apps on iPhones, and eligibility requirements for developers.

“The developers’ community and consumers are eager to offer alternatives to the App Store,” Vestager said. “

In December, a bipartisan group of US lawmakers penned a letter to US President Joe Biden claiming that the DMA unfairly targets US service providers. “Securing our leadership in this sector is imperative for our economy and American workers,” the letter said. “The designation of leading US companies as ‘gatekeepers’ threatens to upend the US economy, diminish our global leadership in the digital sphere, and jeopardize the security of consumers.”

A Question of Fairness

During a recent press call, Věra Jourová, the EU Commission vice president for values and transparency, told InformationWeek the DMA was not biased against American tech firms. “Well, it’s statistics, not bias. Because we have so many American-born companies doing business in the EU, which influence our information space and advertising industry … once we introduced regulations addressing this, we could see that it impacts these big (US) companies.”

Related:EU Big Tech Clampdown Probe Bites Apple, Microsoft

She added, “But our legislation doesn’t make any difference between American and European or other companies.”

In an email to Reuters, an Apple spokesperson said, “As we have done routinely, we will continue to listen and engage with the European Commission.”

Last week, Apple announced it would delay the launch of its AI-powered features in the EU, blaming DMA requirements.