EU antitrust regulators said on Monday that Apple's App Store rules violate European Union technical regulations because they prohibit app developers from directing consumers to alternative services, Reuters reported.
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The EU's technology rules are outlined in the new Digital Markets Act (DMA).
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This opens a new dimension in the increasingly heated battle between US tech giants and Brussels over the EU's DMA.
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What's the problem?
EU authorities have reportedly announced they will launch an investigation into the iPhone maker over new contractual requirements for third-party app developers and app stores.
He pointed out three business conditions for Apple.
“None of these business terms allow developers to steer customers freely,” the EU watchdog said. “For example, developers cannot provide pricing information within the app or communicate with customers in other ways to promote offers available in alternative distribution channels.”
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The European Commission, which also acts as the EU's antitrust and technology regulator, said it has already sent its findings to Apple following an investigation it launched in March, according to reports.
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Apple said on Friday it was delaying the rollout of some recently announced AI features in Europe due to “regulatory uncertainty” related to the DMA.
The DMA rules mean Apple must allow developers who distribute apps through the App Store to inform users of “possible cheaper alternative purchases” free of charge and entice them to take up those offers and make them purchases, the commission said.
The DMA aims to force the world's biggest technology companies, including Apple, to open up to competition in the EU27.
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According to AFP, this is the first time that the DMA has formally charged tech companies under the new rules since it launched its initial investigations into Apple, Google and Meta in March.
What does that mean for Apple?
If the Commission's opinion is upheld, a “non-compliance decision” could be adopted by late March 2025, resulting in multi-billion-dollar fines for Apple.
Under the new law, the commission will have the power to impose fines of up to 10 percent of a company's worldwide revenue, and can impose fines of up to 20 percent on repeat offenders.
Apple's total revenue for the year ending September 2023 is estimated to be $383 billion (Rs 31.99 trillion).
The EU has the right to break up companies, but only as a last resort.
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The European Commission reached a similar conclusion in an investigation it launched in 2020 following a complaint from Swedish music streaming giant Spotify and fined Apple 1.8 billion euros ($1.9 billion) in March.
Apple is also under scrutiny over whether its iOS operating system allows users to easily uninstall apps, as well as the design of its web browser preferences screen.
Who else is at risk?
Apple isn't the only tech giant the EU is targeting.
Google parent Alphabet, Amazon, Meta, Microsoft and TikTok owner ByteDance also must comply with the DMA, as will online travel giant Booking.com later this year.
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