European Union regulators announced today (Monday) that Apple Inc. has breached new digital regulations by restricting users of its App Store from accessing alternative platforms. The European Commission, responsible for enforcing EU laws, disclosed it had launched a fresh investigation into Apple's recent contractual terms with developers.

This action stems from the Digital Markets Act (DMA), a law introduced to curb the dominance of major technology companies. Key to the investigation are rules prohibiting companies like Apple from preventing users from being informed about cheaper purchasing options or subscriptions outside their app stores—a practice known as "anti-steering."

Limiting Developer Freedom

According to preliminary findings, the Commission asserts that Apple's App Store policies inhibit app developers from freely guiding consumers towards alternative channels for offers and content.

While Apple allows developers to direct users to external webpages for transactions like subscriptions, the Commission contends these efforts are constrained by Apple-imposed restrictions, hindering developers' ability to communicate, promote offers, or finalize transactions via their preferred distribution channels.

The Commission also raised concerns over the fees Apple charges developers for acquiring new customers through the App Store, suggesting they exceed what is deemed necessary under the DMA. Specifics on what constitutes a "strictly necessary" fee were not disclosed.

Should Apple be found in violation of the DMA, potential penalties could amount to up to 10% of the company's annual global turnover. Earlier this year, Apple faced a substantial antitrust fine of €1.8 billion for unfairly leveraging its market position in the distribution of music streaming apps, with similar concerns about steering practices playing a pivotal role.

🚨 BREAKING: The EU vs. Apple legal fight is HEATING UP. They suspect Apple is breaching the Digital Markets Act (DMA) and open a new investigation. Here's what you need to know:

➡ Today, the EU Commission announced:
1. it's preliminary view that App Store rules are in breach… pic.twitter.com/4h0sE2U1kq

— Luiza Jarovsky (@LuizaJarovsky) June 24, 2024

Adapting App Store Policies Ahead of EU Regulations

In anticipation of DMA enforcement, Apple has implemented significant changes to its App Store policies in the EU this year. These include allowing apps to be downloaded from websites and third-party app stores on its devices. However, the Commission remains cautious, examining Apple's continued imposition of a "core technology fee" for non-App Store downloads, currently set at €0.50 per app.

Furthermore, regulators are scrutinizing the procedures Apple mandates for users seeking alternative app stores or apps, assessing their compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with EU regulations. The Commission will also evaluate whether criteria for offering alternative app stores or distributing apps directly from the web on iPhones align with the DMA's stipulations.