The European Union has accused Apple of breaching the Digital Markets Act with it “steering” policies.
There is already an open investigation into Apple’s stance on alternative iOS marketplaces in Europe. THe EU is taking a fine tooth comb to the contentious core technology fee charged to developers. The basic concept is that Apple is very proprietary and tends to stifle competition. Is it doing that legally? The regulators clearly aren’t sure.
Margrethe Vestager, head of competition policy in Europe, remarked, “Our preliminary position is that Apple does not fully allow steering. Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers.”
The DMA insists Apple, Alphabet, Amazon, ByteDance, Meta, and Microsoft allow app developers to direct consumers to external offers without incurring charges. These rules have been in effect since March 2024.
Responding to the ruling, Apple spokesperson Peter Ajemian stated: “Apple has made a number of changes to comply with the DMA in response to feedback from developers and the European Commission. All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate. As we have done routinely, we will continue to listen and engage with the European Commission.”
Apple could face serious penalties if the charges stick. The final bill could top $38 billion, about 10% of annual revenue, but that’s the worst case scenario. This fine could double for repeat offenses. Apple is the first company to be charged under these new rules, with Meta and Google also under scrutiny. This is a test case, then, and potentially a warning for others to get their house in order.
Apple was already hit with a $2 billion fine by EU antitrust regulators for similar practices back in 2020. That was triggered by an antitrust complaint from Spotify, so this is a repeat offense and could cost a lot more.
The European Commission also wants to examine Apple’s support for alternative iOS app stores. Key issues include the core technology fee, the complicated process required to install third-party marketplaces, and Apple’s requirements for developers.
Vestager added: “We have also opened proceedings against Apple in relation to its so-called core technology fee and various rules for allowing third-party app stores and sideloading. The developers’ community is eager to offer alternatives to the App Store. We will investigate to ensure Apple does not undermine these efforts.”
Apple has delayed the introduction of key iOS18 features to European users thanks to issues with the regulations. Europe just has a different approach to user privacy and data security, which Apple seems to have issues with..
Now Apple has struck a deal to integrate ChatGPT, OpenAI’s advanced language model, into its ecosystem. Elon Musk claimed the phones would be a security risk and might get banned from his workplaces, but then he might just be drumming up interest in his X phone concept.
Either way, Apple is dealing with a few major issues at the moment and making the deal with OpenAI is basically a public admission of defeat when it comes to LLM and AI tech. Apple Intelligence might offer a sleek UI and a better experience for iPhone users. But the fact it’s powered by ChatGPT will grate with Apple.