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Brussels will sue Apple for allegedly stifling competition in its mobile app store. It is the first time EU regulators have used new digital rules to target a Big Tech group.
The European Commission has found that the iPhone maker is not adhering to obligations to allow app developers to “steer” users to offers outside the App Store without imposing fees on them, according to three people with good knowledge of the matter. the research.
The charges would be the first brought against a tech company under the Digital Markets Act, a landmark legislation aimed at forcing powerful “online gatekeepers” to open their businesses to competition in the EU.
The commission, the EU’s executive arm, said in March it was investigating Apple, as well as Alphabet and Meta, under powers granted by the DMA. An announcement on the charges against Apple was expected in the coming weeks, two people with knowledge of the matter said.
These people said regulators have only made preliminary findings and that Apple could still take action to correct its practices, which could then lead regulators to reassess a final decision. They added that the timing of any announcement could also shift.
The EU could also decide to announce charges against other tech groups, while regulators are still investigating whether Google parent Alphabet favors its own app store and Facebook owner Meta’s use of personal data for advertising.
If Apple is found to be in violation of the DMA, Apple faces daily non-compliance fines of up to 5 percent of average daily global revenue, which currently stands at just over $1 billion.
The move comes at a time when competition watchdogs around the world are increasing their scrutiny of Big Tech companies and their market dominance. In March, the US filed an antitrust lawsuit against Apple, alleging it used its power in the smartphone sector to crush rivals and limit consumer choice.
Epic Games, which sued Apple over the App Store in 2020, is also awaiting a decision from a federal judge in California on whether Apple failed to comply with a US order banning its driving rules, following a series of court hearings in recent weeks .
In January, Apple announced historic changes to its iOS mobile software, App Store and Safari browser in the EU.
The changes were an attempt to appease regulators in Brussels and meant Apple would give users access to rival app stores and download apps from other sources. The changes also include reducing the fee companies pay to use the App Store to sell digital goods and services from 30 percent to 17 percent.
However, the EU is also investigating whether these rate changes are in line with the new digital rules. Apple introduced new fees in Europe, including a 50 cent core technology fee for developers with apps that have more than 1 million users for each first user delivery. Apple will also charge an additional 3 percent fee to app developers who use its payment processor.
Some developers have argued that they could face higher costs as a result of the rate changes. The EU could also announce upfront costs for these developer fees, people familiar with the commission’s thinking say.
According to an analysis by Sensor Tower, consumer spending on Apple’s App Store was “relatively flat” in the second quarter of 2024, suggesting that EU rules have not yet impacted the company’s bottom line.
Apple declined to comment, but pointed to an earlier statement that said: “We are confident that our plan complies with the DMA, and we will continue to work constructively with the European Commission as it conducts its investigation.”
The EU declined to comment.