Apple’s App Store rules violate EU tech rules, EU regulators say

By Foo Yun Chee

AMSTERDAM (Reuters) – Apple Inc’s App Store rules violate EU technology rules because they prevent app developers from steering consumers to alternative offerings, EU antitrust regulators said on Monday, a charge that could result in a heavy fine for the iPhone maker.

The European Commission, which also serves as the European Union’s antitrust and technology regulator, said it sent its preliminary findings to Apple following an investigation launched in March.

The charge against Apple is the Commission’s first under its landmark Digital Markets Act, which seeks to control the power of Big Tech and ensure a level playing field for smaller rivals. You have until March next year to issue a final decision.

EU antitrust chief Margrethe Vestager cited problems with Apple’s new terms.

“As it stands, we think these new terms do not allow app developers to communicate freely with their end users and enter into contracts with them,” she said at a conference.

The Commission said that under most commercial terms, Apple allows guidance only through “link-outs,” meaning that app developers can include a link in their app that redirects the customer to a web page where the customer can conclude a contract.

He also criticized the fees charged by Apple to facilitate developers’ initial acquisition of a new customer via the App Store, saying they went beyond what was strictly necessary for such remuneration.

Apple said it has made a number of changes in recent months to comply with the DMA after receiving feedback from developers and the Commission.

“We are confident that our plan complies with the law and estimate that more than 99% of developers would pay the same or fewer fees to Apple under the new commercial terms we created,” the company said in an email.

The EU executive said it was also opening an investigation into the iPhone maker over its new contractual requirements for third-party app developers and app stores and whether these were necessary and proportionate.

Violations of the DMA can cost companies fines of up to 10% of their global annual turnover.

(Reporting by Foo Yun Chee; Editing by Emelia Sithole-Matarise)