A few months after opening a non-compliance case against Apple and the Digital Marketing Act (DMA), the European Commission has shared its preliminary findings with Apple. And the bottom line is that the current App Store rules violate DMA. Confirmed violations of the DMA can result in fines of up to 10% of global annual turnover.
‘Act differently’ should be their new watchword,” said EU Internal Market Commissioner Thierry Breton. He wrote at X. “For too long, Apple has squeezed out innovative companies — denying consumers new opportunities and choices.”
In this particular case, the European Commission believes that third-party developers should be able to inform customers of alternative purchase options — free of charge.
For example, developers who have released apps on the App Store cannot advertise different prices or alternative distribution channels on their apps. While Apple now allows developers to include a link to their website, the European Commission believes there are too many restrictions with this linking mechanism.
Even if developers redirect users to their sites and handle transactions on their sites, they must report transactions to Apple and pay a fee. Apple only waives a 3% payment processing fee for web purchases.
“Apple has made certain changes to comply with DMA in response to feedback from developers and the European Commission,” the company said in a statement. “We are confident that our plan complies with the law, and we estimate that more than 99% of developers would pay the same or less fees to Apple under the new business terms we created.”
In addition to these preliminary findings, the European Commission is launching a third investigation into non-compliance with Apple’s new contractual terms for EU developers. This time, the Commission is set to focus on Apple’s controversial Core Technology Fee (CTF) and alternative app markets.
European developers can stick to standard business terms or choose new business terms that allow them to distribute their apps outside of the App Store. However, these new terms lead to a charge of €0.50 per installed app after one million downloads.
The company has already adjusted the CTF to not apply to free non-commercial apps. There is also a three-year transition period for small developers who launch a successful app and get more than one million downloads for the first time. But that doesn’t change much in the long run. With this new formal investigation, the EC will determine whether the CTF is effectively complying with the DMA.
If you tried to install a third-party app store in the EU, such as AltStore, Setup Mobile or Aptoide, you may have noticed that it requires quite a few taps. You first get an error in your browser. You must open the Settings app, accept app installations from this site, return to your browser, download the alternative store again, and accept pop-ups about the risks of a third-party app store. The EC will consider this ‘multi-step user journey’ and its compliance with the DMA rules.
“We are concerned that Apple has designed its new business model to discourage app developers and end users from taking advantage of the opportunities DMA provides,” said Margrethe Vestager, the Commission’s EVP for competition policy. speaking.
“The DMA’s letter is clear: gatekeepers must allow alternative app stores to be installed on their platforms. and to fully inform consumers about the offers available to them. So that they can freely choose where they want to source their applications and under what conditions,” he added.
Regarding today’s preliminary findings, Apple can now respond in writing to the European Commission. The final decision is expected a year after the official investigation began, meaning Apple can negotiate with the EU and readjust its business terms to avoid a hefty fine.
