Apple Is the First Company Charged With Violating EU’s Competition Law
The company is accused of preventing developers from “steering.”
The European Commission has accused Apple of violating the Digital Markets Act (DMA), an EU regulation that serves to protect competition in the tech space. Apple, which must follow the DMA’s rules exclusively in the EU, is the first company to be charged under the Act.
The Commission is specifically honing in on what it refers to as the App Store’s anti-steering practices, arguing that Apple must allow app developers to link to external sites, where app users can then pay for certain services – essentially steering them out of the app to avoid the cut Apple takes of in-app purchases.
An investigation conducted by the Commission found that Apple prevented developers from including external links for payment within the app. Instead, under the business terms the company provided developers, Apple allowed steering only through special “link-outs.” If a user made a purchase via the link-out within seven days, Apple charges developers a cut.
The DMA, however, requires app stores to allow developers to steer free of charge.
“Our preliminary position is that Apple does not fully allow steering,” said Margrethe Vestager, the executive vice president in charge of competition policy for the Commission. “Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers.”
“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,” Apple said in a statement, per Gizmodo.
“All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate.”
If the Commission moves forward to fine Apple, the company could be liable to pay billions. According to the Financial Times, the fee could equate to 10% of Apple’s yearly revenue, approximately $30 billion USD.
