The preliminary findings and the new investigation into Apple’s controversial developer policies reflect a broad but in-depth inquiry into the duopolistic app store market
Apple is found to be violating the DMA with its app store business terms
On 24 June 2024, the EC issued its preliminary findings from its investigation into Apple under the Digital Markets Act (DMA) and announced an additional DMA investigation into the firm. The ongoing investigation, launched on 25 March 2024, centres around suspected non-compliant conduct in relation to the Apple App Store and Apple’s Safari web browser. The preliminary finding that Apple has violated the DMA by including anti-steering policies in its App Store business terms for developers represents the first charges to be brought under the law. Apple will now have the opportunity to respond to the findings and to defend its policies. The EC has until 25 March 2025 to issue its final decision in the investigation. If the EC confirms its preliminary findings, Apple could face fines worth up to 10% of its worldwide turnover.
The EC’s findings detail how Apple limits the ability of developers to steer consumers out of the App Store to complete purchases
Though the original investigations launched into Apple’ conduct focused on both its Safari browser and App Store, the preliminary findings issued by the EC only address conduct related to the App Store. Specifically, the findings cited a series of conditions included in Apple’s business terms for app developers as violating the DMA’s steering requirements. When developers distribute their apps through the Apple App Store, they are limited under Apple’s contract terms in their ability to steer users to alternative, and potentially cheaper, purchasing channels. Though developers can include “link outs”, which direct app users to an external webpage to complete a purchase, the promotion of and process for accessing these external webpages carry a number of restrictive conditions set by Apple. The EC also found that the fees Apple charges developers when users engaged first in the App Store proceed to follow a link out are excessive. Taken together, the EC believes that these terms limit the ability of developers to inform users about other purchasing opportunities and freely steer those users to alternative channels to complete transactions.
Apple’s controversial Core Technology Fee will be the focus of the EC’s additional investigation into the firm’s App Store policies
In addition to issuing its preliminary findings, the EC also launched another investigation into the App Store under the DMA. This investigation will centre on Apple’s contractual terms for developers related to alternative app stores, including the firm’s controversial Core Technology Fee. The fee structure, which charges developers an additional €0.50 (£0.43) per user past 1 million each year, was the focus of extensive criticism from app developers, including Epic Games, and almost immediately a source of scepticism for the EC about Apple’s broader plans to ensure compliance with the DMA. Alongside an investigation into the Core Technology Fee, the EC will also consider the process Apple created for downloading alternative app stores onto iPhones and the eligibility requirements Apple enforces for developers seeking to distribute apps through alternative stores. Outside of the scope of the investigation, the EC also noted it would continue “preliminary investigative steps” into Apple’s process for validating apps and alternative app stores which are sideloaded onto devices. Given the depth and range of these inquiries into the Apple App Store, it appears reasonable to expect a similar level of scrutiny in the EC’s ongoing investigation into the Google Play app store, understood to represent the other party in the broadly duopolistic app store market.
