Introduction
Apple, one of the world’s largest tech companies, is under scrutiny again. On Monday, European Union (EU) regulators charged Apple with violating the bloc’s technology rules. This charge might lead to a hefty fine for Apple, which is also facing another investigation over new fees imposed on app developers.
Key Points:
- Violation of Digital Markets Act (DMA): The European Commission accused Apple of breaching the DMA, aiming to control Big Tech’s power and create fair competition for smaller companies.
- Possible Fines: If found guilty, Apple could face a fine of up to 10% of its global annual revenue.
- New Investigation: The EU is also probing Apple’s new contractual requirements for third-party app developers.
Detailed Breakdown
1. First Charge Under DMA
The European Commission, acting as the EU’s antitrust and technology regulator, issued its preliminary findings against Apple after an investigation initiated in March. This is the first charge under the DMA, which targets tech giants like Apple, Google, and Meta to ensure they don’t misuse their market power.
EU Antitrust Chief’s Statement:
Margrethe Vestager, the EU antitrust chief, highlighted concerns about Apple’s new terms. She noted that these terms limit app developers from freely communicating and making contracts with their users.
- Quote: “As they stand, we think that these new terms do not allow app developers to communicate freely with their end users, and to conclude contracts with them,” said Vestager.
Apple has until March next year to address these concerns to avoid fines.
2. Apple’s Response
Apple has responded by stating that it has already made several changes to comply with the DMA based on feedback from both app developers and the European Commission.
- Quote: “As we have done routinely, we will continue to listen and engage with the European Commission,” Apple stated in an email.
Apple allows app developers to steer users only through ‘link-outs,’ directing them to web pages where contracts can be concluded. The Commission, however, criticized Apple for charging fees beyond what is necessary.
- Quote: “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 added.
New Contractual Requirements Investigation
1. Core Technology Fee
The EU has launched another investigation into Apple’s new contractual requirements for third-party app developers and app stores. This includes:
- The core technology fee charged to major app developers, even if they don’t use Apple’s payment services.
- The multi-step process for downloading and installing alternative app stores on iPhones.
- Eligibility requirements for developers to offer alternative app stores or distribute apps directly from the web.
2. Criticism from Industry
Companies like Epic Games, the creator of Fortnite, have criticized these new fees, arguing they are unnecessary and stifle competition.
Conclusion
The EU’s actions signal a strong stance against tech giants like Apple, ensuring they play fair in the digital market. With multiple investigations and potential fines looming, Apple is under significant pressure to align its practices with the new regulations.
What’s Next?
- Final Decision: The Commission will make a final decision by March next year.
- Ongoing Scrutiny: Apple and other tech giants will continue to face investigations and possible regulatory actions both in Europe and the US.
