European Commission says Apple in breach of EU competition rules

GENEVA

The European Commission on Monday said Apple is breaching the EU’s Digital Markets Act (DMA) with its App Store rules as it prevents app developers from freely steering consumers to alternative channels for offers and content.

In preliminary findings sent to the company, the commission said that none of Apple's business terms allow developers to freely steer their customers, while under most of the business terms available to app developers, the company allows steering only through "link-outs."

Although Apple can receive a fee for facilitating via the AppStore the initial acquisition of a new customer by developers under the DMA, the commission found that the fees charged by Apple "go beyond what is strictly necessary" for such remuneration.

Under the DMA, developers distributing their apps through Apple's App Store should be able, free of charge, to inform their customers of alternative cheaper purchasing possibilities, steer them to those offers, and allow them to make purchases.

"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," EU Commissioner for Competition Margrethe Vestager said in a statement.

If the commission's preliminary views were to be ultimately confirmed, none of Apple's three sets of business terms would comply with the DMA, which requires gatekeepers to allow app developers to steer consumers to offers outside the gatekeepers' app stores, free of charge.

The commission would then adopt a non-compliance decision within 12 months from the opening of proceedings on March 24.

3rd non-compliance probe

The commission also opened a new non-compliance procedure against Apple over concerns about its new contractual requirements for third-party app developers and app stores, including Apple's new Core Technology Fee.

Under the new fee, developers of third-party app stores and third-party apps must pay a €0.50 ($0.54) fee per installed app.

"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," Vestager said.

"The developers’ community and consumers are eager to offer alternatives to the App Store," she said, and added: "We will investigate to ensure Apple does not undermine these efforts."