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Brussels has accused Apple of stifling competition in its App Store, marking the first time EU regulators have filed charges against a Big Tech group under new digital rules.
The European Commission has been preparing for years to unleash the full authority of its new Digital Markets Act against Big Tech. The groundbreaking rules are intended to help startups by forcing powerful “online gatekeepers” – most of which are US companies – to open their businesses to competition.
Tech groups had to comply with the law from March this year.
In preliminary findings published Monday, regulators in Brussels said they were concerned about restrictions Apple is placing on developers’ ability to “freely direct their customers” by directing them to promotions outside the App Store.
Thierry Breton, EU Commissioner for the Internal Market, said: “Apple’s new slogan should be ‘trade differently’. Today we are taking further steps to ensure Apple complies with DMA rules.”
If found guilty, the iPhone maker could face a fine of up to 10 percent of its annual global sales, meaning each fine could amount to tens of billions of dollars. The fines could rise to 20 percent if the violation is repeated, the EU said. Apple said it was “confident” in its compliance.
Margrethe Vestager, the EU’s executive vice-president responsible for digital policy, said at a conference on the DMA in Amsterdam on Monday: “We are dealing with the largest and most valuable companies in the world. The DMA is not excessive demand. [It] It is pure vanilla to ask for a fair, open and contestable marketplace.”
She added: “I find it surprising that some of the most valuable, respected major companies on the planet don’t treat compliance as a badge of honor.”
The commission’s preliminary findings must be completed within a year of the start of the official investigation in March. The measure against Apple was first reported this month by the Financial Times.
The commission, the bloc’s executive branch, also announced Monday that it is investigating whether Apple’s developer fees violate EU rules.
The fee includes a fee of 50 cents per download that companies must pay if their app is used by more than 1 million people.
As part of the new investigation into developer fees, Brussels said it was investigating whether Apple placed too many restrictions on users’ ability to download and install alternative app stores.
Apple said it has “made a number of changes to comply with the DMA in response to feedback from developers and the European Commission.”
“We believe our plan is compliant with the law, and estimate that more than 99 percent of developers would pay the same or less fees to Apple under the new business terms we have created,” the company said.
In January, Apple introduced historic changes to its iOS mobile software, app store and Safari web browser in the EU as part of efforts to address competition concerns.
On Friday, the tech giant said it is delaying the introduction of artificial intelligence features on iPhones in the EU due to the uncertainty caused by new technical rules.
Apple is under increasing pressure from EU regulators. The company was fined 1.8 billion euros this year for suppressing competition from rival music streaming services. Apple is challenging the fine in the European courts.
“If the Commission indeed finds that Apple is violating the letter or spirit of the DMA, it will have to impose fines that really hurt – that is the only language Big Tech understands,” said Markus Ferber, a German lawmaker.