The European Union (EU) has charged Apple with violating the Digital Markets Act (DMA), which came into effect in May 2023.
The DMA targets major tech companies, including Alphabet, Apple, Amazon, Google, Bytedance, Meta, and Microsoft. The EU Commission has designated Apple as a gatekeeper under several core platform services, including operating systems (iOS and iPadOS), messaging platform (iMessage), and intermediation (App Store).
The EU Commission’s press release highlighted that “Apple does not fully allow steering,” a practice that prevents developers from reaching iOS customers outside of the App Store. This anti-steering policy has been deemed a violation of the DMA, prompting the EU to demand that Apple permit developers to direct consumers to alternative marketplaces without imposing additional taxes.
Margrethe Vestager, European Commissioner for Competition, expressed concern over Apple’s business model, which appears to discourage app developers and end users from utilizing the opportunities provided by the DMA.
“The letter of the DMA is clear: gatekeepers have to allow for alternative app stores to establish themselves on their platforms; and for consumers to be fully informed about the offers available to them. So that they can freely choose where they want to source their apps, and at what conditions,” Vestager stated.
Earlier this year, Apple opened iOS and iPadOS to third-party stores in the EU. However, the company still imposes a core technology fee of €0.50 per download for apps with over 1 million downloads, along with an additional 3% fee for using Apple’s payment processor. These new rules and fees have not satisfied the European Commission, which views them as inconsistent with the DMA’s objectives.
Apple has been given until March 2025 to comply with the DMA. Failure to do so will result in a hefty fine of 10% of Apple’s global revenue, amounting to approximately $38 billion (€35.4 billion). Repeated violations could increase the fine to 20% of global revenues.
This development marks a crucial moment in the EU’s ongoing efforts to regulate big tech companies and ensure fair competition in the digital marketplace. The outcome of this case will likely have significant implications for the future of app distribution and consumer choice in the tech industry.