APPLE

EU rejects changes to Apple's European app store: company could be fined 10% of global turnover

The EU today announced that it is not satisfied that changes to the Apple App Store comply with the Digital Markets Act (DMA), and the company is now officially under investigation for non-compliance.

If this investigation finds that Apple has failed to comply with antitrust laws, the iPhone maker could be fined up to 10% of its global turnover – increasing to 20% for repeated violations…

Current situation

The DMA requires tech giants to ensure that they do not use their dominant market position to give their own products and services an unfair advantage over competing products.

The first step in this process was to decide whether which companies qualify as gatekeepers under the law, that is, companies whose power was sufficient to effectively harm competitors. Apple found itself the gatekeeper to the App Store, as the developer had no other way to sell iPhone apps. This meant that the company was required to make policy changes to comply with the DMA.

Apple has announced that it will allow third-party app stores, but with a ton of asterisks. These include charging underlying technology fees for any app sold outside the App Store's own, potentially putting small developers out of business.

We said at the time that these proposals would not satisfy the EU.

We said at the time that these proposals would not satisfy the EU.

We said at the time that these proposals would not satisfy the EU.

We said at the time that these proposals would not satisfy the EU.

We said at the time that these proposals would not satisfy the EU.

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At that time we said that these proposals would not satisfy the EU.

At that time we said that these proposals would not satisfy the EU.

At that time we said that these proposals will not satisfy the EU.

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Apple probably bought some time here – partly because what it came up with is so It's difficult that it will take some time for regulators to digest all the details and crunch all the numbers.

But that seems to be the case. there's little doubt that Apple is committed to doing everything it can to make exiting the App Store as difficult and expensive as possible.

After all the dust has settled, it's becoming abundantly clear that regulators have no intention of considering what that Apple has complied with the DMA requirements.

Changes in the App Store have been checked for non-compliance

As we predicted, the EU today announced that it is not satisfied with the changes made by Apple and the company is now being investigated for non-compliance. Google and Meta are also under investigation for their own responses to DMA.

Today, the Commission launched an investigation into non-compliance with Digital Markets Act (DMA) requirements in Alphabet's Google Play governance and Google Search self-preference policies, Apple's App Store governance and opt-in screen for Safari, and Meta's “payment or opt-in model.” /p>

The Commission suspects that the measures taken by these gatekeepers do not effectively comply with their obligations under the DMA.

In addition, the Commission has opened an investigation into Apple's new fee structure for alternative app stores [… ] Apple's new fee structure and other terms for alternative app stores and online app distribution (sideloading) may defeat the purpose of its obligations under Article 6(4) DMA.

Safari's choice screen is also under investigation

Another DMA requirement was that that Apple had to guarantee iPhone users a free choice of web browser. The company announced that this will be possible thanks to a new options screen during iPhone setup.

This has already been implemented and seems to have at least some small effect. However, the EU is not satisfied with the specifics of this process – perhaps it is simply a matter of the wording used. This problem is probably easy to solve.

The maximum penalty is 10% of total global turnover.

The maximum fines allowed by many laws are trivial for a company the size of Apple, but this is not the case with DMA.

If a violation occurs, the Commission can impose a fine of up to up to 10% of the company’s total global turnover. Such fines can be as high as 20% for repeat violations.

Best comment by Karl Meszáros

Liked by 23 people

Apple management will have to admit that they will have to adapt to the new reality. They made trillions of dollars. They have a huge, loyal consumer base. They will achieve incredible success no matter what. The only real danger to them is if governments push back to the point where they do something drastic.

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Apple's 2023 revenue was $383 billion, which could mean fines worth up to $38 billion initially. , will grow to $76 billion.

The investigation is scheduled to be completed in less than a year

Such investigations take time, but in this case the stated goal is to complete them in less than a year – which by normal standards is lightning fast.

This, however, will not be the end of the matter. If the EU does find Apple non-compliant, the Cupertino company will appeal the decision, and then we could face literally years of legal battles as the case moves up the judicial hierarchy.

Photo by: Pixabay

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