EU Regulators: Apple Breaches Tech Rules, Faces New Probe

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EU Regulators Find Apple in Breach of New Tech Rules, Launch New Probe

Team FS

24/Jun/2024

Key Points:

1: EU regulators find Apple in breach of DMA for restricting customer steering to alternatives on App Store.

2: New probe launched into Apple's contractual terms with developers under the DMA.

3: Concerns raised over fees and practices related to app distribution and alternative app stores.

European Union regulators have taken significant steps against Apple, alleging the tech giant is in violation of new regulations designed to curb the dominance of Big Tech companies. The European Commission, through its Digital Markets Act (DMA), has focused on Apple's App Store practices, particularly concerning anti-steering rules and contractual terms with developers.

Breaches of DMA:
The EU regulators have preliminarily found that Apple's App Store rules prevent app developers from freely guiding consumers to alternative purchasing channels or subscription options. This restriction, termed as anti-steering rules, is seen as inhibiting competition and consumer choice, contrary to the DMA's provisions aimed at fostering a fair digital marketplace.

New Probe into Contractual Terms:
In addition to the anti-steering rules, the EU has launched a fresh investigation into Apple's contractual terms with developers. This probe scrutinizes how Apple's terms may restrict developers' ability to communicate, promote offers, or conclude contracts through preferred distribution channels, potentially further undermining fair competition principles outlined in the DMA.

Financial Implications:
The Commission also scrutinizes the fees Apple charges for app distribution and initial customer acquisition via the App Store, questioning whether these fees exceed what is considered "strictly necessary." Potential fines under the DMA could amount to up to 10% of Apple's global annual turnover if violations are confirmed, highlighting the significant financial implications of regulatory non-compliance.

Changes and Concerns:
While Apple has made adjustments to its App Store policies in anticipation of the DMA, including allowing downloads from websites and third-party app stores, concerns remain. The EU has raised issues about additional charges like the "core technology fee" for alternative app store downloads and the user journey complexities required for such downloads, prompting further investigation into compliance with EU regulations.

Future Regulatory Outlook:
Looking forward, EU regulators are set to evaluate whether Apple's recent changes and practices meet the requirements set forth in the DMA. Key areas of focus include the accessibility of alternative app stores on Apple devices and the transparency and fairness of conditions for developers offering competing apps and services.

Conclusion:
In conclusion, the EU's scrutiny of Apple under the DMA underscores ongoing efforts to regulate digital markets and ensure fair competition in the tech industry. As regulatory investigations proceed, stakeholders will monitor developments closely, anticipating potential outcomes that could reshape Apple's operations and compliance strategies within the European market. Stay informed with updates on Apple's regulatory challenges and their implications for the broader digital economy.

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EU Regulators Find Apple in Breach of New Tech Rules, Launch New Probe

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