EU could slap huge fine on Apple after accusing it of breaking new tech rules

European Union regulators have accused Apple of violating tough new digital competition rules by preventing app developers from freely directing consumers to cheaper services.

The European Commission’s preliminary findings stem from an investigation opened in March. If found guilty, the company could be fined up to 10% of its annual global turnover of $383 billion, the EU executive said in a statement on Monday. The fine can be increased to 20% of the company’s global turnover in the event of a repeat offense, the press release added.

Monday’s action marks the first time the Commission has accused a company of violating its landmark digital markets law. The DMA, which came into force in March, is a broad set of competition rules aimed at limiting the power of Big Tech.

That month, the Commission announced that it had opened investigations into Apple (AAPL), Google’s parent alphabet (GOOGLE) and Facebook parent Meta (META), suspected of not complying with the DMA.

The three companies were referred to as “guardians» by the Commission — Large technology companies are essential to business-consumer interactions through their links to “core platform services,” such as digital marketplaces and app stores.

The Commission must make the final decision on whether Apple failed to comply with the DMA within one year of opening its investigation on March 25.

Apple said in a statement Monday that over the past few months 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 that our plan complies with the law.

More control

The Commission provisionally found that, under Apple’s App Store rules, “developers cannot provide in-app pricing information” or communicate “in any other way” with their customers for direct you towards offers available on alternative platforms.

Apple allows so-called “steering” by developers only through links in their apps that redirect customers to a web page, the Commission said. But this “binding process is subject to several restrictions,” he adds.

“Today is a very important day for the effective enforcement of the DMA,” EU competition and digital chief Margrethe Vestager said in a statement Monday. “Piloting is essential to ensure that app developers are less dependent on gatekeepers’ app stores and that consumers are informed of the best deals.”

Apple said in its statement: “All developers doing business in the EU on the App Store have the opportunity to use the features we have introduced, including the ability to direct app users to the Web to make purchases at a very competitive rate. As we do regularly, we will continue to listen and engage with the European Commission.

The Commission also said it had opened another investigation to determine whether Apple’s new contractual requirements for app developers violated the DMA…

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