Apple Hit With New Warning Over Alleged Breaches Of EU's Digital Markets Act

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by Tyler Durden
Monday, Jun 24, 2024 - 02:25 PM

Antitrust regulators in Brussels accused Apple of non-compliance under the Digital Markets Act (DMA), marking the first instance of these new digital rules being directed against big tech giants. At the heart of the dispute, regulators claim that Apple's current App Store rules breach the DMA, preventing users from finding cheaper options elsewhere. A violation of the DMA can lead to fines of up to 10% of global annual turnover.  

"'Act different' should be their new slogan," the EU's internal market commissioner, Thierry Breton, wrote on X, adding,

"For too long, Apple has been squeezing out innovative companies — denying consumers new opportunities & choices." 

Breton continued, "Today, we are taking further steps to ensure AppStore & iOS comply with DMA." 

The European Commission said Monday that Apple must allow app developers to direct users to cheaper options, sometimes outside the App Store. This would allow Apple to comply with the bloc's DMA. 

If found guilty, Apple faces a fine of up to 10% of its global annual revenue, which could top tens of billions of dollars. The EU noted that the fine could surge up to 20% if repeated offensives are seen. 

In January, Apple tweaked its iOS mobile software, app store, and Safari web browser to appease regulators in Brussels. 

"We are confident our plan complies with the law, and estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created," Apple said in a statement in response to today's news out of the EU, who was quoted by Bloomberg

Earlier today, EU antitrust chief Margrethe Vestager spoke at a conference on the DMA in Amsterdam and cited issues with Apple's new terms, saying the world's most valuable company was falling short of compliance. She said Apple could avoid fines if it can modify its business terms. 

"We are dealing with the biggest and most valuable companies on the planet. The DMA is not an excessive ask. [It] is plain vanilla to ask for a fair, open and contestable marketplace," Vestager said. 

She added, "I find it surprising that some of the most valuable, respected big companies on this planet do not take compliance as a badge of honor."

A final decision in the DMA case is slated for the second half of March 2025. If Apple does not comply, another legal battle could erupt between Apple and EU regulators.

Besides Apple, the DMA specifies that big tech companies like Amazon, Google, and Microsoft cannot push their services ahead of rivals and must offer an equal playing field for competitors. 

In early March, EU regulators fined Apple 1.8 billion euros "for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users." 

"If the Commission indeed finds that Apple infringes the letter or the spirit of the DMA, it has to impose fines that really hurt - that is the only language Big Tech understands," said German MEP Markus Ferber.