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EU finds Apple in breach of new competition act, opening additional investigation into its practices

Apple said last week that the new EU regulations could also postpone the release of its AI services.

By Livia Giannotti

The European Commission (EC) has found that Apple’s app store is in breach of new EU competition rules, the same regulations that prompted the tech giant to announce a potential delay in releasing its new AI features just days ago.

Apple logo shown alongside EU flag and App store icon
Apple is the first company to be found in breach of the EU’s Digital Markets Act. (Photo: JRdes / Shutterstock)

On Monday, the Commission said that the App Store’s anti-steering practices violate the Digital Markets Act (DMA), which constitutes the first breach of the new set of regulations. The EC, acting as a competition and technology regulator in the EU, found that the App Store restricts developers from directly promoting cheaper offers to users outside its own store, which charges an average commission of 30%.

“We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA,” said EU Commissioner Thierry Breton. He added on an X post that “for too long Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.”

The DMA was introduced in August 2023 to regulate competition in the digital economy, especially between major tech companies such as Apple, Meta, Google and Amazon. Apple is the first business to face charges under this legislation, following the EC’s preliminary findings that “Apple does not fully allow steering,” Margrethe Vestager, the EU’s competition chief, said in a statement on Monday. She added: “Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers.”

Apple has until March 2025 to rectify its practices and comply with the rules before it could face a fine of up to 10% of its global revenue. 

A spokesperson for the tech giant said on Monday that Apple has already made several changes to comply with the DMA since the EC and developers both accused it of anti-competitive behaviour in March.

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“We are confident our plan complies with the law, and estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created,” the spokesperson said.

“All developers doing business in the EU on the App Store have the opportunity to utilise the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate.”

EU opens additional investigation against Apple over its new terms for developers

In March 2024, Apple made “DMA-related” changes to its services in the EU to respond to previous warnings by the Commission. More specifically, the iPhone maker updated its contract terms for third-party app developers to provide them with “more flexibility” and make it easier to set up app stores outside of its branded one.

However, the Commission announced on Monday that it opened a separate non-compliance procedure to investigate whether these new contractual terms also violate the DMA.

“We have also opened proceedings against Apple in relation to its so-called core technology fee and various rules for allowing third-party app stores and sideloading,” Vestager said in a statement. “The developers’ community and consumers are eager to offer alternatives to the App Store. We will investigate to ensure Apple does not undermine these efforts.”

Apple says release of its AI features could be delayed because of the DMA

The DMA affects more than just Apple’s app store practices. On Friday, Apple said that “regulatory uncertainties brought about by the DMA” could potentially postpone the release of its newly announced features, including the AI-powered service Apple Intelligence.

The company said in a statement that it is “concerned that the interoperability requirements of the DMA could force us to compromise the integrity of our products in ways that risk user privacy and data security.”

The EC has not specified the exact reasons that prompted Apple’s statement, but said that “gatekeepers are welcome to offer their services in Europe, provided that they comply with our rules aimed at ensuring fair competition.”

Read more: Privacy concerns prompt cancellation of Meta AI European launch

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