Apple accused of violating EU technology rules, faces new investigations

JAKARTA – On Monday, June 24, the EU antitrust authority accused Apple of violating EU technology regulations. The act could result in a huge fine for iPhone makers, who also face other investigations related to new costs imposed on app developers.

The European Commission, which is also the EU’s antitrust and technology regulator, said it sent Apple its preliminary findings after an investigation launched in March.

The indictment against Apple is the first indictment brought by the Commission under the Digital Markets Act (DMA), which aims to curb the power of Big Tech and ensure fair competition for smaller competitors. The commission has until March next year to issue a final decision.

Violations of the DMA may result in financial penalties of up to 10% of a company’s total annual turnover.

The head of the EU antitrust office, Margrethe Vestager, cited issues related to Apple’s new regulations, claiming that these regulations do not meet DMA requirements. Apple can avoid penalties if it addresses these issues by modifying its business provisions.

“At this time, we believe that these new regulations do not allow app developers to communicate freely with end users and enter into contracts with them,” Vestager said at the conference.

He said the decision on how to comply with DMA regulations rests with Apple and it is not his responsibility to tell the company what to do.

Apple said it has made a number of changes in recent months to comply with DMA requirements after receiving feedback from app developers and the Commission.

“As we have done regularly, we will continue to listen and engage with the European Commission,” he said.

The commission says that under most business regulations, Apple only allows “link-out” redirection, meaning app developers can include links in their apps that direct customers to websites where they can enter into contracts.

The commission also criticized Apple’s costs for making it easier for developers to start attracting new customers through the App Store, saying those costs exceeded the compensation actually needed.

“We believe our plans are lawful and expect that more than 99% of developers will pay Apple the same or lower fees under the new business provisions we develop,” Apple said.

NEW CONTRACTUAL REQUIREMENTS

EU executives also said they had launched an investigation into iPhone makers over new contract terms for third-party app developers and app stores, as well as whether these requirements are necessary and proportionate.

The issues include the cost of the underlying technology, the multi-step process of downloading and installing alternative app stores on iPhones, and the feasibility requirements that developers must meet in offering alternative app stores or distributing live apps from the Internet on iPhones.

Apple introduced a new fee in the EU in March that covers core technology costs for major app developers even though they don’t use any of Apple’s payment services, prompting criticism from “Fortnite” maker Epic Games and others.

Vestager also criticized Apple’s announcement last week that it would delay the rollout of AI features in the EU, which the company blamed on the DMA. Vestager said it appeared Apple was suggesting that integrating artificial intelligence could be anti-competitive.

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