Thursday, July 25, 2024

Apple charged by EU for App Store breach under Digital Markets Act

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The preliminary finding is the first action to be taken against a company under Europe’s recently-enacted Digital Markets Act

Margrethe Vestager, European Commission executive vice-president in charge of competition policy

Apple has been found in breach of EU rules for failing to let developers and competitors inform customers about alternatives.

The preliminary finding is the first action to be taken against a company under Europe’s recently-enacted Digital Markets Act and could result in a substantial fine.

It’s the second major action taken against Apple in Europe about its app store in relation to anti-competitive behaviour. In March, Apple was fined €1.8bn by the European Commission for discriminating against Spotify and other music apps by preventing them from telling customers about cheaper, alternative methods of subscribing outside the app.

While Apple said that it had introduced new measures to meet EU requirements, the European Commission today said that these have fallen short of fair competition. In particular, the EU institution said that Apple’s ‘core technology fee’ on developers was unfair.

The Commission can impose fines up to 10pc, rising to 20pc in cases of repeated infringements, of a company’s total worldwide turnover.

The move is the latest clash between the EU and big US tech companies.

Last week, Apple said it would delay the rollout of its newly-announced AI features for iPhones and Macs because of its concerns over regulatory clashes with Europe.

And Meta was asked to “pause” the rollout of its AI services in Europe last week by Ireland’s data protection commissioner amid privacy concerns.

The Commission said that the size of the fine was imposed with regard to Apple’s huge financial clout.

“Today is a very important day for the effective enforcement of the Digital Markets Act,” said Margrethe Vestager, the Commission’s executive vice-president in charge of competition policy.

“We have sent preliminary findings to Apple. 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. 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.”

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