Apple faces the first lawsuit over EU digital market law violations, and could be fined up to $6 trillion if found guilty
The European Commission has issued a preliminary opinion against Apple, alleging that the company has violated the Digital Markets Act (DMA) by taking excessive fees from app developers and preventing them from freely offering content through alternative channels. This is the first time that a lawsuit has been filed under the act.
Digital Markets Act
Apple is the first company to be charged with violating EU's DMA rules - The Verge
https://www.theverge.com/2024/6/24/24184629/apple-dma-steering-infringement-ruling
Under the DMA, developers who distribute apps through the App Store can inform customers of cheaper purchasing options and steer them towards those options.
However, in the European Commission's view, Apple's rules do not allow developers to freely steer customers - for example, they are not allowed to display pricing information within the app or promote ways to purchase the app through other channels (such as the developer's own store).
Apple also charges developers fees that the European Commission has deemed 'exceeding strictly necessary.'
The European Commission's preliminary opinion gives Apple an opportunity to defend itself. If Apple's defense is not successful and the preliminary opinion is found to be correct, Apple will not be in compliance with Article 5.4 of the DMA, which requires that Apple 'allows customers to be directed to apps other than the app store,' and the European Commission will be able to take new measures.
Since the DMA came into force, Apple has tried to comply with the law by allowing app downloads from sources other than the App Store, but has imposed restrictions such as imposing high fees on app developers who use external app stores, called 'Core Technology Fees (CTFs),' and requiring users to follow multiple steps to access external app stores.
The European Commission has also noted that there may be problems with the above restrictions, and has announced that it will conduct a new investigation into whether CTFs and other measures that require users to follow multiple steps are adequately compliant with the DMA.
The DMA provides that in the event of a breach of its provisions, the European Commission may impose fines of up to 10% of a company's global turnover. In the event of repeated breaches, the fines can increase to a maximum of 20%. In addition, in the event of systematic breaches, the Commission may take measures such as requiring a company to divest its business or parts of it, or prohibiting it from acquiring further services related to the systematic breaches.
According to technology media The Verge, Apple could be hit with fines of up to $38 billion based on 2023 figures.
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