EC Tentatively Finds Apple App Store Breaches DMA

Apple's App Store violates the Digital Markets Act (DMA) because it prevents app developers from freely steering consumers to alternative channels for offers and content, the European Commission said in preliminary findings Monday. It also opened a third probe against the company over concerns that its new contracts for third-party app developers and app stores, including its own "Core Technology Fee," don't ensure effective compliance with the law. Under the DMA, developers who distribute their apps via the App Store should be able to tell customers about other, cheaper purchasing options and steer them in that direction, the EC noted. Apple has three sets of business terms governing its relationship with developers, yet none let developers communicate freely with customers. In fact, the EC said, under most of the provisions, Apple allows steering only via "link-outs" -- links developers can include in their apps that redirect customers to a web page where they can sign contracts. Another concern is that Apple's fees for facilitating developers' initial acquisitions of customers on the App Store "go beyond what is strictly necessary." Apple may review and reply to the investigation documents. If the EC's views are confirmed, all three sets of business terms would fail to comply with the DMA, which requires "gatekeepers" to allow app developers to direct customers to app stores outside their own for free. If noncompliance is confirmed, the EC could set fines of up to 10% of Apple's total annual worldwide revenue and, in cases of systematic breaches, could also force it to sell its business or the part of it related to the infringement. The European Consumer Organisation praised the EC's "swift enforcement action." Apple didn't comment. Apple is one of several Big Tech companies designated under the DMA as gatekeepers. That means they have a certain annual revenue in the European economic area and provide platform services in at least three EU countries; offer core platform services to more than 45 million monthly active end users in the EU and more than 10,000 yearly active businesses established in the EU; and met the second criterion during the past three years (see 2309250020).