The European Commission may soon put pressure on Apple over App Store rules • Registry

The European Commission is said to be preparing to bring charges against Apple, saying “steering” rules imposed on third-party developers distributing software through the App Store violate Europe’s Digital Markets Act (DMA).

The DMA, which came into force in March, is a European competition law that requires large service providers – Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft – to take steps to promote competition on certain platforms. Apple has been designated by the EU as the guardian of iOS, iPadOS, Safari and the App Store.

According to the Financial Times, three people familiar with the commission’s investigation into Apple confirmed that competition officials had made a preliminary finding that the iPhone maker had failed to meet DMA requirements.

If Apple is unable to convince the committee otherwise and the preliminary findings are found valid, the tech giant could face daily penalties of 5 percent of its average daily annual turnover of just under $1 billion (PDF) – or about $50 million a day . But Apple, if accused, will have a chance to defend itself. IBiz did not respond to a request for comment.

Shortly before Europe’s DMA law went into effect in early March, the commission fined Apple $2 billion for applying its control rules to music apps, specifically Spotify. Moreover, there has been speculation that Apple’s unenthusiastic response to the DMA may prompt the Commission to use the example of Cook & Co.

Apple in its App Store guidelines requires apps to use Cupertino’s own purchasing system for in-app transactions, with an exception for “Reader” apps that display previously purchased content.

Apple imposed this rule to ensure it could get a 30 percent cut of in-app transactions, or 15 percent for smaller businesses.

This arrangement has been contested around the world, resulting in various concessions, including the recent introduction of “permissions” that allow developers to connect to third-party payment systems for stores and music streaming apps in certain geographic areas – although the sales commission payable to iGiant is only three percentage points less.

In the US, Epic Games sued Apple in 2020 over its App Store policies. Although the game company mostly suffered losses, it managed to convince Judge Yvonne Gonzalez Rogers to rule that Apple’s control policies were anti-competitive.

After Apple and Epic appealed unsuccessfully to the U.S. Supreme Court, the Ninth U.S. Circuit Court of Appeals left the lower court’s ruling unchanged.

Apple responded by offering developers permission to direct users to third-party payment mechanisms, provided those who did so paid Apple 27 percent (or 12 percent for small businesses) of the third-party transaction.

Epic Games is currently challenging Apple’s compliance, claiming it is inconsistent with the judge’s order. Spotify is also not satisfied with the system set up by Apple.

Apple was forced to make concessions in the Netherlands and South Korea. Support for third-party payment entitlements was briefly implemented in Russia last year, although this site is no longer available. Earlier this year, the Russian government imposed a financial penalty on Apple based on a decision from July 2022. Although Apple left Russia in March 2022, shortly after the illegal invasion of Ukraine, its devices are still used there.

In Japan, where Apple’s control rules were rolled back in 2021, the national parliament this week passed a law requiring Apple and Google, the other major app store operator, to adapt third-party app stores and other payment mechanisms.

This week in the US, four more states joined the government’s antitrust lawsuit against Apple.

Either Apple will be forced to develop a consistent set of global rules that address competition concerns and legal obligations, or those developing apps for Cupertino platforms will have to follow an increasingly complex set of rules that vary by country, app genre, and revenue and corporate imagination. ®