Following regulatory action by European Union officials, it could be fined up to 10% of its global annual revenue. According to the preliminary results of the study, block said the company violated the Digital Markets Act (DMA). rules by not allowing App Store developers to freely inform users about alternative payment options outside the Apple ecosystem.
If found guilty, Apple could face tens of billions of dollars in fines under the DMA’s tough penalties. If a DMA violation is repeated, fines can reach 20 percent of global annual revenue.
The European Commission, the executive power of the EU, . It has 12 months from that start date to finalize preliminary results. It also marks the first regulatory action under the DMA notes.
The EC initially found that Apple violated anti-steering regulations. Large technology companies subject to the DMA are required to inform third-party developers of alternative ways for users to make purchases without paying the developers.
Authorities determined that Apple had none of their initial findings allow developers to direct customers to alternative payment options. EC notes that Apple doesn’t allow developers to tell users how much less they can pay elsewhere.
The commission said Apple only allows developers to use link-outs — in other words, they can include a link to a web page to make a payment. “The linking process is subject to a number of restrictions imposed by Apple, which prevent software developers from communicating, promoting offers, and entering into contracts through their preferred distribution channel.”
Regulators added that while Apple has the right to charge developers for helping them find new customers through the App Store, “the fees charged by Apple go beyond what is strictly necessary for such a reward.” For example, they state that developers must pay a fee to Apple for any digital service or any purchase of goods that someone makes within seven days of switching to the app.
Developers must Any purchases made through the App Store (Google charges similar fees for Play Store purchases). That way, developers can offer consumers cheaper prices if they shop away from the App Store.
In 2020, Epic Games reported Fortnite Through the game’s mobile apps, players can pay less for V-Bucks by purchasing in-game currency . and they quickly downloaded the game from their app market, leading to legal battles that are still ongoing. However, thanks to DMA, Epic plans to do just that and re-release the mobile version Fortnite on the block later this year.
The EC also launched a new investigation against Apple regarding another potential DMA violation. The block took issue with the new fees Apple is charging developers “to access some of the new features provided by DMA,” such as the ability to offer a third-party app marketplace, as well as app downloads through other means, . EC notes that Apple still allows developers to continue operating under a previous agreement that did not allow them to use alternative distribution channels.
Developers who sign up for the new terms are subject to what Apple calls a core technology fee. This equates to a charge of €0.50 per user after the first million users. Payment, which , even for downloads from third-party software markets. Many of Apple’s competitors on new terms (also ).
The EC is also investigating whether Apple has made it too difficult for users to install third-party app markets and apps. The third part of the investigation concerns “eligibility requirements for developers to offer alternative app stores or to distribute apps directly from the web on iPhones,” such as the need to have a developer account in good standing.
Engadget has reached out to Apple for comment.
The company recently found itself in hot water on a similar front – the bloc – with the EU for violation of anti-steering regulations. The commission alleged that Apple prohibited third-party developers of music streaming apps from telling iOS users that they could pay less for a subscription if they signed up outside the Apple ecosystem.
Meanwhile, Apple said the company is delaying the rollout of Apple Intelligence, the company’s name generative AI feature set It will debut in iOS 18 – and some other features in the EU. “We are concerned that the DMA’s interoperability requirements may force us to compromise the integrity of our products in ways that could endanger user privacy and data security,” the company said. Bloomberg.
