Hu Yun Qi
AMSTERDAM (Reuters) – European Union antitrust regulators accused Apple of breaking EU technology rules on Monday, a charge that could expose the iPhone maker to heavy fines. The company also faces fresh scrutiny over new fees imposed on app developers.
The European Commission, which also serves as the European Union's antitrust and technology regulator, said it had sent Apple its preliminary findings following an investigation it launched in March.
The charges against Apple are the first by the European Commission under a landmark digital markets law aimed at curbing the power of big tech companies and levelling the playing field for smaller rivals. The Commission is due to make a final decision by March next year.
Violations of the DMA can result in fines of up to 10% of a company's annual worldwide turnover.
European Union antitrust chief Margrethe Vestager cited Apple's new terms as not complying with the DMA, saying Apple could avoid fines if it addressed its concerns by changing its terms of trade.
“As it stands, we believe these new terms do not allow app developers to freely communicate and enter into contracts with end users,” she told the conference.
She said it's up to Apple to decide how to comply with the DMA, and it's not for her to tell the company what to do.
Apple said it has made several changes over the past few months to comply with the DMA after receiving feedback from app developers and the European Commission.
“As always, we continue to listen and respond to the European Commission's input,” the company said in an email.
The Commission said that in most of its terms and conditions, Apple only allows inducements through a “link-out”, meaning that app developers can include a link within their app that redirects customers to a web page where they can conclude a contract.
The company also criticized fees that Apple charges developers to help them initially acquire new customers through the App Store, saying they go beyond what is strictly necessary to provide such compensation.
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“We believe our plans comply with the law and estimate that under the new terms we have created, more than 99 percent of developers will pay Apple the same or lower fees,” Apple said in an emailed statement.
New Contract Requirements
EU authorities said they would launch an investigation into the iPhone maker over new contractual requirements for third-party app developers and app stores, and whether these were necessary and adequate.
At issue are the company's core technology fees, the multi-step user journey to download and install alternative app stores on the iPhone, and the eligibility requirements for developers to offer alternative app stores or distribute apps directly from the web on the iPhone.
Apple introduced new fees in the EU in March, including a core technology fee that would be levied on major app developers that don't use its payment service, drawing criticism from companies including “Fortnite” maker Epic Games.
Vestager also criticized Apple's announcement last week that it would delay the launch of its AI-enabled features in the EU, which the company blamed on the DMA. Vestager said Apple seemed to be suggesting that its AI integrations could be anti-competitive.
(Reporting by Hu Yun Qi; Editing by Emilia Sithole Matarides)
