EU accuses Apple of breaking competition rules

Tech giant faces penalty of up to 10% of global annual revenue

A shopper in a Berlin Apple shop. The European Union (EU) has accused Apple of stifling competition on its app store, marking the first time EU regulators have used new digital rules on a big tech group. Photograph: Krisztian Bocsi/Bloomberg

The European Union (EU) has accused Apple of stifling competition on its app store, marking the first time EU regulators have used new digital rules on a big tech group.

The European Commission’s regulatory action falls under the Digital Markets Act, stringent rules designed to break the dominance of large technology platforms and help start-ups. The move against Apple was first reported by the Financial Times this month.

If found guilty, Apple faces a penalty of up to 10 per cent of its global annual revenue. The fines can rise to 20 per cent in the event the offence is repeated, the EU said.

The commission’s preliminary findings have to be finalised within one year from the start of its official investigation in March.

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Thierry Breton, the EU internal market commissioner, said: “Apple’s new slogan should be ‘act different’. Today we take further steps to ensure Apple complies with the DMA rules.”

The commission, the bloc’s executive arm, also announced on Monday that it was investigating whether Apple’s developer fees breached the bloc’s rules.

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The fees include a charge of 50 cents per download that companies have to pay if their app is used by more than 1 million people.

As part of the new probe into developer fees, Brussels said it was looking at whether Apple was imposing too many restrictions for users to download and install alternative app stores.

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Regulators in Brussels are concerned about restrictions Apple is imposing on developers’ ability to “freely steer their customers”.

Apple said it had “made a number of changes to comply with the DMA in response to feedback from developers and the European Commission”.

“We are confident our plan complies with the law, and estimate more than 99 per cent of developers would pay the same or less in fees to Apple under the new business terms we created,” the company said.

In January, Apple introduced historic changes to its iOS mobile software, app store and Safari web browser in the EU as part of efforts to appease competition concerns.

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On Friday, the tech giant said it was delaying the introduction of artificial intelligence-enabled features on iPhones in the EU because of the uncertainty brought about by new tech rules.

Apple has been under increasing pressure from EU regulators. The company was fined €1.8bn this year for stifling competition from rival music streaming services. Apple is contesting the fine in EU courts. -Copyright The Financial Times Limited 2024