The European Commission has imposed a €500m ($568.5m) fine on iPhone maker Apple, citing a breach of the Digital Markets Act’s (DMA) anti-steering obligations, a move labelled as “economic extortion” by the US.
The decision follows a period of extensive discussions where Apple had the opportunity to present its perspective and arguments in detail.
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The DMA mandates that app developers who distribute their applications through Apple’s App Store must have the capability to freely inform customers of alternative purchasing options outside of the App Store. They should also be able to direct customers to these alternatives and facilitate transactions.
Investigations into Apple’s App Store policies regarding steering began on 25 March 2024.
The findings indicate that Apple has not adhered to this requirement. Due to several constraints set by the company, app developers are unable to fully exploit the benefits of distributing their apps through channels other than the App Store.
Consequently, consumers are also unable to access alternative and potentially less expensive offers, as Apple hinders app developers from directly communicating such opportunities. The company has not successfully shown that these limitations are objectively necessary or proportionate.
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By GlobalDataThe commission’s current directive requires Apple to eliminate both technical and commercial barriers related to steering.
Additionally, the company must avoid engaging in similar non-compliant behaviour in the future, which includes any actions with an equivalent purpose or impact.
The penalty assigned to Apple reflects the severity and duration of the non-compliance.
Furthermore, the commission has concluded its investigation into Apple’s user choice obligations due to the company’s early and proactive efforts towards a compliance solution.
Apple is expected to adhere to the commission’s directives within a 60-day timeframe or face the possibility of recurring fines.
In parallel actions, Facebook’s parent company Meta has been fined €200m for violating DMA rules that require offering consumers a service option that uses less personal data.
The commission remains in dialogue with both companies to ensure adherence to its decisions and broader compliance with the DMA.
Meanwhile, a White House spokesperson told Reuters: “This novel form of economic extortion will not be tolerated by the United States.
“Extraterritorial regulations that specifically target and undermine American companies, stifle innovation, and enable censorship will be recognised as barriers to trade and a direct threat to free civil society.”
Earlier this year, the UK Competition Appeal Tribunal dismissed a legal claim against Apple and online retailer Amazon, which had alleged reseller collusion.
