The photo illustration shows the Apple logo on a smartphone with the EU flag in the background.
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European Union regulators said on Monday that Apple was violating sweeping new technology rules by not allowing its App Store to steer customers to alternative products.
The European Commission, the EU’s executive body, also announced it had launched a new investigation into Apple over its new contract terms with developers.
In March, the EU launched an investigation into Apple, Alphabet, and Meta under a landmark new law aimed at curbing the power of big tech companies, the Digital Markets Act (DMA). So-called anti-steering rules were one of the main focuses of the investigation. Under the DMA, tech companies cannot stop telling users about cheaper options for their products or subscriptions outside of app stores.
In its preliminary findings on Monday, the regulator said Apple was in violation of the DMA because its App Store rules “prohibit app developers from freely directing consumers to alternative channels for offers and content.”
CNBC has reached out to Apple for comment.
According to the European Commission, Apple only allows app developers to do so through a system where they direct users to a web page where they can provide a link to purchase content, such as a subscription. But this process is “subject to a number of restrictions imposed by Apple, which prohibit app developers from communicating, promoting offers or concluding contracts through distribution channels of their own choosing,” the Commission noted.
Regulators also said that fees that Apple charges developers to initially acquire new customers through its App Store are “in excess of strictly necessary,” though the commission did not specify what “strictly necessary” fees were.
If found to be in violation of the DMA, Apple could be fined up to 10% of its total annual worldwide revenue.
US tech giants have been targets in the EU this year, with regulators hitting Apple with an antitrust fine of 1.8 billion euros ($1.93 billion) in March for abusing its dominant position in the market for distributing music-streaming apps. Steering rules were also a focus of that investigation.
EU launches new investigation into DMA
Apple made major changes to its EU App Store this year in anticipation of the DMA, with the Cupertino giant now allowing users to download apps on their own devices from third-party app stores as well as websites.
But the European Commission also expressed concerns about some of Apple’s new practices.
Apple still charges a “core technology fee” of 50 euro cents ($0.54) for each app downloaded outside its App Store, and the European Commission said it was investigating whether this complies with the DMA.
Regulators are also investigating whether Apple’s procedures for letting users download alternative app stores and apps comply with European Union rules.
The Commission will also consider whether “qualification requirements relating to the ability to offer alternative app stores or distribute apps directly from the web on the iPhone” comply with technology law.
