INFORMATION TECHNOLOGY
EU Commission v Apple, App Store Infringes the Digital Markets Act (EU Regulation 2022/1925).
The EU Commission informed Apple that the App Store rules breach the Digital Markets Act (DMA), as they prevent app developers from freely directing consumers to alternative channels for offers and content.
In addition, the EU Commission started a new non-compliance proceedings against Apple due to concerns that its new contractual requirements for third-party app developers and app stores, including Apple's new 'Core Technology Fee', fail to ensure effective compliance with Apple's obligations under the DMA.
According to the DMA, developers who distribute their apps via Apple's App Store should be able, free of charge, to inform their customers about cheaper alternative purchase options, direct them to such offers, and allow them to make purchases.
Apple currently has three categories of commercial terms governing its relationship with app developers, including App Store address rules. The EU Commission notes at the outset that:
- none of these commercial terms allow developers to freely guide their customers. In particular, developers cannot inform customers of prices within the app or otherwise communicate with their customers to promote offers available on alternative distribution channels;
- in most of the terms of business available to app developers, Apple allows guidance only through 'link-out', i.e., app developers may include in their app a link that redirects the customer to a web page where the customer can conclude a contract. The link-out process is subject to numerous restrictions imposed by Apple that prevent app developers from communicating, promoting offers and concluding contracts through the distribution channel of their choice.
Although Apple may receive a fee for facilitating the initial acquisition of a new customer by developers via the App Store, the fees charged by Apple go beyond what is strictly necessary for such a fee.
Apple now has the opportunity to exercise its rights of defence by examining the documents contained in the European Commission's investigation file and responding in writing to the executive's preliminary findings.
If the Commission's preliminary findings are confirmed, the Commission will adopt a non-compliance decision within 12 months of the opening of the proceedings (25 March 2024).
In addition, the EU Commission started a new non-compliance proceedings against Apple due to concerns that its new contractual requirements for third-party app developers and app stores, including Apple's new 'Core Technology Fee', fail to ensure effective compliance with Apple's obligations under the DMA.
According to the DMA, developers who distribute their apps via Apple's App Store should be able, free of charge, to inform their customers about cheaper alternative purchase options, direct them to such offers, and allow them to make purchases.
Apple currently has three categories of commercial terms governing its relationship with app developers, including App Store address rules. The EU Commission notes at the outset that:
- none of these commercial terms allow developers to freely guide their customers. In particular, developers cannot inform customers of prices within the app or otherwise communicate with their customers to promote offers available on alternative distribution channels;
- in most of the terms of business available to app developers, Apple allows guidance only through 'link-out', i.e., app developers may include in their app a link that redirects the customer to a web page where the customer can conclude a contract. The link-out process is subject to numerous restrictions imposed by Apple that prevent app developers from communicating, promoting offers and concluding contracts through the distribution channel of their choice.
Although Apple may receive a fee for facilitating the initial acquisition of a new customer by developers via the App Store, the fees charged by Apple go beyond what is strictly necessary for such a fee.
Apple now has the opportunity to exercise its rights of defence by examining the documents contained in the European Commission's investigation file and responding in writing to the executive's preliminary findings.
If the Commission's preliminary findings are confirmed, the Commission will adopt a non-compliance decision within 12 months of the opening of the proceedings (25 March 2024).
