The European Commission has concluded that Apple is in breach of the Digital Markets Act (DMA). Following an investigation, the regulator determined that the App Store’s rules do not permit app developers to direct consumers to alternative offers. If Apple is found guilty of violating the DMA provisions, the company faces a fine of up to 10% of its total annual revenue.
In March of this year, the European Commission sent preliminary results to Apple based on its investigation. This case may mark the first time a regulator has used this new law to restrict the activities of a major technology company. The final decision on this matter will be made no later than March next year. “We believe that the new policies in their current form prevent app developers from freely communicating and transacting with end users,” said Margrethe Vestager, head of the EU competition authority.
Commission Criticisms and Apple’s Position
The European Commission’s report noted that while Apple allows developers to place a link in their applications to a third-party website, enabling clients to subscribe or pay for a service, this measure is insufficient. The report also criticized the commission fees that Apple charges developers for initially attracting new users to the App Store.
In response, Apple stated that it has already made several changes over the past few months to comply with DMA requirements. “We are confident that our plan complies with the law and believe that more than 99% of developers will pay Apple the same or less under the new business conditions we have created,” Apple said in a statement.
The European Commission has announced plans to launch another investigation into Apple to assess the new terms of interaction between Apple and third-party app developers and app stores, adds NIX Solutions. This investigation aims to evaluate the necessity and proportionality of these new terms. We’ll keep you updated on the developments of this case. A DMA violation could be costly for Apple, potentially resulting in a fine of up to 10% of the company’s annual revenue.