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The European Commission has officially called out Apple for failing to comply with the EU’s Digital Markets Act (DMA) in its latest ruling regarding the App Store. Despite Apple’s attempts to amend its practices, the Commission believes that the company’s new terms still fall short of what is required by the law. As a result, the tech giant faces further penalties unless it aligns its business practices with the DMA’s mandates.
Apple’s Struggle with Compliance
In April, Apple was slapped with a hefty €500 million fine, marking the first step of the European Commission’s ongoing crackdown on the company. Now, the Commission has issued a new directive, demanding Apple align its App Store terms with the DMA within 30 days, or face periodic penalty payments. These fines will continue to accumulate until Apple complies with the Commission’s instructions.
The crux of the issue revolves around Apple’s anti-steering restrictions, which prevent app developers from informing users about alternative payment options outside the App Store. The DMA mandates that “gatekeepers” like Apple must allow developers to promote these alternative payment methods within their apps, without charging a commission on such transactions. Apple’s failure to fully meet these requirements has drawn severe criticism.
Despite Apple’s attempts at making changes earlier this year, the European Commission’s ruling concluded that these adjustments are insufficient. Apple’s new terms, which allow developers to include external links to their websites, still impose restrictive conditions. For instance, the external links must use Apple’s format and cannot pre-fill user data. Additionally, Apple charges a 27% commission on transactions made through these external links, a significant reduction from the usual 30% for in-app purchases. The Commission finds that these measures still hinder the effectiveness of the DMA.
What Undercode Says:
The ongoing battle between Apple and the European Commission underscores a significant tension in the tech world: the balance of power between tech giants and regulatory bodies. Apple has long enjoyed a dominant position in the mobile app ecosystem, with the App Store acting as the central hub for app distribution and revenue generation. However, with the European Commission pushing forward with the DMA, the company faces increasing pressure to relinquish some of its control and adopt more transparent practices.
Apple’s attempt to comply with the DMA by introducing external links for payments is a step in the right direction, but it’s evident that these changes are more cosmetic than substantial. The 27% commission on external purchases is still a significant fee, and the technical restrictions on how external links function undermine the intent of the DMA. Furthermore, Apple’s argument that the DMA doesn’t require it to “technically enable” steering does not seem to hold water in the eyes of the European Commission.
The ruling could have broader implications for other app platforms, as it sets a precedent for how the DMA will be enforced. If Apple is forced to comply with the new regulations, it could open the door for similar actions against other tech giants that control access to app marketplaces. For developers, the European Commission’s stance represents a victory in the ongoing struggle for fairer terms in the app economy.
Fact Checker Results
Apple’s recent changes, while moving in the right direction, do not fully comply with the DMA.
The European Commission is insistent that the new terms do not adequately address anti-steering restrictions.
The 27% commission is still seen as excessive by the Commission, especially when compared to the 0% commission required under the DMA.
Prediction
The next 30 days will be crucial for Apple. If the company fails to make the required changes to its App Store practices, it could face severe financial penalties. The ongoing scrutiny from the European Commission will likely influence how other regions approach similar regulatory challenges for tech giants, potentially reshaping the app economy globally. If Apple does not find a way to accommodate the DMA’s requirements, we may see a ripple effect across the tech industry, forcing other platform holders to reconsider their business models.
References:
Reported By: 9to5mac.com
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