Apple Charged With Violating EU Technology Rules, Facing New Investigations

Head of EU antitrust, Margrethe Vestager, (photo: x @vestager)

JAKARTA - The European Union's antitrust regulator indicted Apple of violating the bloc's technology rules on Monday, June 24. This indictment could lead to a huge fine for iPhone makers who are also facing other investigations related to the new costs imposed on app developers.

The European Commission, which is also an antitrust regulator and EU technology, said it had sent its initial findings to Apple following an investigation launched in March.

The indictment against Apple is the first by the Commission under the Digital Markets Act (DMA) to seek to limit Big Tech's power and ensure fair competition for smaller competitors. The Commission has until March next year to issue a final decision.

DMA violations can result in fines of up to 10% of the company's global annual turnover.

The EU's antitrust chief, Margrethe Vestager, cited issues with Apple's new provisions, saying that these provisions do not meet DMA requirements. Apple can avoid fines if it can address these concerns by modifying its business provisions.

"At the moment, we think that these new provisions don't allow app developers to communicate freely with their end users, and to complete contracts with them," Vestager said at a conference.

He said it was up to Apple to decide how to comply with the DMA and it was not its responsibility to tell the company what to do.

Apple said it had made a number of changes in recent months to comply with the DMA after getting input from app developers and the Commission.

"As we have done regularly, we will continue to listen and interact with the European Commission," he said.

The Commission says that under most business provisions, Apple only allows diversion via 'link-out', meaning app developers can include links in their apps that direct customers to web pages where customers can complete contracts.

The Commission has also criticized Apple's costs for facilitating the start acquisition of new customers by developers through the App Store, saying that the costs exceed what is really needed for the remuneration.

"We believe our plans comply with the law, and expect more than 99% of developers will pay the same or less fees to Apple under the new business provisions we make," Apple said.

NEW CONTRACT REQUIREMENTS

EU executives also said they opened an investigation into iPhone makers over new contract terms for third-party app developers and app stores as well as whether these requirements were necessary and proportionate.

The problem is the cost of core technology, the multi-step process for downloading and installing alternative app stores on iPhones, and the feasibility requirements for developers to offer alternative app stores or distribute live apps from the web on iPhones.

Apple introduced the new fee in March at the EU, which includes core technology costs for major app developers even though they don't use any payment services from Apple, prompting criticism from "Fortnite" maker Epic Games and others.

Vestager also criticized Apple's announcement last week that it would delay the launch of the AI feature in the EU blamed by the company on the DMA. Vestager said that it appeared that Apple was hinting that its AI integration might be anti-competitive.