EU regulators accuse Apple of breaching digital competition rules for app stores

LONDON — European Union regulators accused Apple on Monday of violating new rules on digital competition by imposing rules on its App Store marketplace that prevent app makers from directing users to cheaper options elsewhere.

The European Commission said that based on the preliminary conclusions of its investigation, the iPhone maker had violated the 27-nation bloc’s Digital Markets Act.

The rulebook, which is also known as the DMA and came into effect in March, is a broad set of regulations aimed at preventing technological “gatekeepers” from cornering digital markets.

Under the provisions, app developers should be allowed to inform customers about cheaper purchasing options and direct them to those offers.

The commission, the bloc’s executive arm, said Apple’s App Store rules “prevent app developers from freely directing consumers to alternative channels for offers and content.”

Apple now has the opportunity to respond to the findings, which the commission will evaluate. A final decision on compliance by Apple must be made by March 2025. The company could face fines worth up to 10% of its global revenue, which could amount to billions of euros, or daily fines.

The commission also kept up the pressure on Apple and at the same time opened a new investigation into the company’s compliance with the DMA, analyzing the new contractual terms that Apple has offered to app developers.

Regulators focused on a 50-euro cent (54 cent) “core technology fee” that Apple now charges developers every time its apps are downloaded and installed from outside of Apple’s App Store. The DMA provisions pave the way for alternative app stores to offer consumers more choice. Rivals had criticized the fee, saying it would discourage many existing free apps, which pay no fees, from abandoning ship.

Apple Inc. said that in recent months it “has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission.”

“We are confident that our plan complies with the law and estimate that more than 99% of developers would pay the same or less in fees to Apple under the new commercial terms we created,” the company said in a statement. “All developers doing business in the EU on the App Store have the opportunity to use the capabilities we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive price.”

The company said it will “continue to listen to and engage” with the commission.