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  • Voltaire Staff

EU rejects Apple's App Store changes, may fine firm for up to 10% of global revenue

The European Union (EU) has launched a formal investigation against Apple for potential non-compliance with EU anti-trust laws, citing dissatisfaction with tech giant's recent alterations to its App Store and violating the region's Digital Markets Act.

Should the investigation confirm Apple's violation of these regulations, the company could face hefty fines, amounting to 10 per cent of its worldwide turnover, with penalties increasing to 20 per cent for repeated infringements, reported 9to5Mac.

Apple's turnover in 2023 amounted to $383 billion, implying potential fines ranging from $38 billion initially to $76 billion for subsequent offenses.

The Digital Markets Act (DMA) mandates that tech industry must guarantee that they do not leverage their dominant market positions to unfairly promote their own products and services over those of competitors.

Initially, the process began by identifying which companies met the criteria of "gatekeepers" as per the law. These are the companies that wield substantial enough power to potentially harm competitors.

Apple emerged as a gatekeeper concerning the App Store, given its exclusive platform for selling iPhone apps. Consequently, Apple was mandated to enact policy adjustments to align with the DMA.

Apple's response included the announcement of permitting third-party app stores, albeit with several caveats. These conditions encompassed imposing a Core Technology Fee for apps sold outside of its platform.

The changes were not to the satisfaction of the EU, which has announced brought Apple again under the scanner.

Google and Meta are also under scrutiny for their responses to the DMA.

Investigatory steps have been taken regarding Apple's new fee structure for alternative app stores. Concerns have been raised that Apple's fee structure and terms for alternative app stores may undermine the purpose of its obligations under Article 6(4) of the DMA.

Another DMA requirement was for Apple to ensure that iPhone users could freely choose their web browser. The company introduced a new option screen during iPhone setup to fulfil this obligation. While this has been put into effect and appears to have some impact, the EU remains dissatisfied with certain aspects, possibly due to wording issues. However, this issue is expected to be easily resolved.

Although such investigations typically take time, the aim in this case is to conclude within a year, a notably swift pace compared to the usual standard.






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