EU Commission charges Apple with Digital Markets Act violations

Brussels (Brussels Morning) – The European Commission has informed Apple that its App Store rules are breaching the Digital Markets Act. Further, it has also unlocked the investigation of new contractual requirements for third-party app developers and app stores.

The European Commission has notified Apple of its preliminary view that its App Store practices are in breach of the Digital Markets Act (DMA), as they stop app developers from freely driving consumers to alternative channels for offers and content. 

In addition, the EU Commission extended a new non-compliance procedure against Apple over situations where its new contractual requirements for third-party app developers and app stores, including Apple’s new “Core Technology Fee”, are insufficient to ensure adequate compliance with Apple’s obligations under the DMA.

How does Apple manage developer relationships in the App Store?

Apple presently has three sets of business terms managing its relationship with app developers, including the App Store’s steering controls. The Commission preliminarily discovers that None of these business terms permit developers to freely steer their customers. Under most of the company terms available to app developers, Apple permits steering only through “link-outs.” Whilst Apple can obtain a fee for facilitating via the AppStore the initial purchase of a new customer by developers, the fees levied by Apple go beyond what is strictly required for such remuneration. 

By sending preliminary findings, the EU Commission informs Apple of its preliminary opinion that the company violates the DMA. 

What non-compliance issues does the EU have with Apple?

Moreover, the EU Commission has also unfolded a third non-compliance investigation into Apple’s new contractual tenures for developers as a condition to access some of the new features allowed by the DMA, notably the provision of alternative app stores or the possibility to submit an app via an alternative distribution medium. Apple has so far held the option to subscribe to the aforementioned conditions, which do not permit alternative distribution channels at all.

Are Apple’s alternative app store conditions DMA compliant?

The Commission will examine whether these new contractual requirements for third-party app developers and app stores violate the DMA and notably the condition and proportionality requirements provided therein. This includes Apple’s Core Technology Fee, under which creators of third-party app stores and third-party apps must spend a €0.50 fee per installed app. 

The Commission will investigate whether Apple has confirmed that the fee structure that it has set, as part of the new business spans, and in particular the Core Technology Fee, actually complies with the DMA.

What is Apple’s multi-step process for alternative app downloads?

Furthermore, the examination includes Apple’s multi-step user journey to download and lodge alternative app stores or apps on iPhones. The Commission will investigate whether the actions that a user has to launch to successfully complete the download and installation of alternative app stores or apps, as well as the different information screens portrayed by Apple to the user, comply with the DMA.

The eligibility conditions for developers related to the capacity to offer alternative app stores or directly allocate apps from the web on iPhones. The Commission will examine whether these requirements, such as the ‘membership of good standing’ in the Apple Developer Program, that app developers have to fulfil in order to be able to benefit from alternative distribution supplied for in the DMA comply with the DMA.

Similarly, the EU Commission will continue embarking on preliminary investigative steps outside of the scope of the current investigation, in particular concerning the checks and reviews put in position by Apple to validate apps and alternative app stores to be sideloaded.