A few months after opening a non-compliance case on Apple and the Digital Markets Act (DMA), the European Commission has shared its preliminary findings with Apple. And the bottom line is that the current App Store rules are in breach of the DMA. Confirmed violations of the DMA can lead to fines of up to 10% of global annual turnover.
“‘Act different’ should be their new slogan,” the EU’s internal market commissioner, Thierry Breton, wrote on X. “For too long, Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.”
In this particular case, the European Commission believes third-party developers should be able to inform customers of alternative purchasing possibilities — free of charge.
For instance, developers who have released apps on the App Store can’t advertise different prices or alternative distribution channels in their apps. While Apple now allows developers to include a link to their site, the European Commission believes there are too many restrictions with this link-out mechanism.
Even if developers redirect users to their websites and handle transactions on their websites, they have to report transactions to Apple and pay a commission. Apple only waives a 3% payment processing fee for web purchases.
Excellent news:
At the heart of Monday’s findings are three elements of Apple’s practices, including fees charged to app developers for every purchase made within seven days of linking out to the commercial app.
This is, in my opinion, the most egregious non-compliant practice from Apple. They have no reason whatsoever to entitle themselves to purchases made outside their repository just because the software runs on their hardware. It’s also the most asinine set of rules that they established to pretend that they were complying with the DMA.
It’s a bit disappointing that it will take so long before the fines can be enforced, but I really hope that they get the maximum penalty over this because it’s really the most shockingly brazen breach of the DMA’s terms. In fact, I hope that they get imposed the maximum penalty multiple times - the same article I linked mentions that there are two other DMA investigations being launched into Apple, though I don’t know what grounds those other investigations are looking into.
And I really hope Apple gets the message loud and clear: they’re gonna start making less money. And this is a good thing. They don’t deserve it, and they were never entitled to it in the first place. This is what happens when you invent new revenue streams that are criminally worthless.
fact, I hope that they get imposed the maximum penalty multiple times
Max penalty would be breaking up Apple. It’s even defined in the law. First comes 10% of revenue, then 20, then dissolution (didn’t know the English term( Thanks billiam0202) )
“Dissolution” is the word you’re looking for.
Thanks. I’ll fix that
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From another article it said that they have 12 months to fix their violation. If they don’t comply by then the EU can issue the fine.
Edit: Here is the article: https://www.theguardian.com/technology/article/2024/jun/24/apple-breach-eu-competition-rules-digital-markets-act
IMO 12 mo is too much. They will wait till the dead line to public the “fix.”
Yeah, they will, but I think for this to work and be respected, they need to give companies this period, because it actually could take alot of time to change.
In this case, not so much, but it could be in the future, and the rules are the same regardless.
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The intent is to allow companies time to implement the change. But if you’ll pardon my cynicism, in practice, what ends up happening is companies just use it as a tactic to delay the implementation and continue recording the revenue.
At the very least they should forfeit the revenue that they earn during the period for this. I’m not sure exactly how the fines work and whether they take this into account, but I doubt Apple is seriously going to use the 12-month period to actually come clean and change their ways. I think they’ll just use it as more time to come up with some new bullshit form of non-compliance.
If after 12 monty they actually comply then thats still a positive.
However i fear they may “fix” it with malicious compliance at 11 months and then the cycle repeats.
Instead what i think should happen is they should need to obtain “verified compliance” within a year. (Minus the time europe takes to check) and if the term expires the penalty goes up to eventually forced splitting up.
I actually agree with you, that Apple most certainly will stall. And I also don’t think it’s optimal, but huge decisions on how to go forward do take time.
And I just think it may be better in the long run, that it seems more “fair” for the company, even thought it’s not.
Also, if Apple doesn’t comply this time and tries to find a new bullshit form of non-compliance, there’s no second chance according to the EU law. The fine will hit, so they certainly won’t do that.
forfeit the revenue that they earn during the period for this
I like this. This will give them the urgency and motivation to plug the hole ASAP, rather stall and repeat the cycle.
That’s 90% of a year’s revenue they could be missing out if they fixed it now, yeah
