The European Commission is expanding its investigation of Apple based on preliminary findings of anticompetitive breach of the new Digital Markets Act (DMA). The Commission has found the App Store engages in “anti-steering” by preventing app purveyors from offering consumers “alternative channels for offers and content.” The Commission also opened a new investigation into App Store developer contracts, citing  the “core technology fee” implemented in January in what was perceived as a workaround to the new European Union rules, saying such policies “fall short of ensuring effective compliance with Apple’s obligations under the DMA.”

Passed in 2022, one of the DMA’s central tenets is to even the playing field among Big Tech and smaller competitors. It gives European regulators broad authority to police “online gatekeepers” and, when deemed necessary, demand they adjust their business practices.

The New York Times says Big Tech is viewing the move as a signal that the EU is intensifying its already aggressive approach to regulatory enforcement.

“Amazon, Google and Meta are also facing investigations under the new competition rules, while TikTok and X are facing probes under another law intended to force Internet companies to more aggressively police their platforms for illicit content,” reports NYT.

The move could have a chilling effect on the global tech market, prompting companies to delay the introduction of new products and services due to regulatory concerns.

The Wall Street Journal reports that “Apple said its new AI system, called Apple Intelligence, would be among the products it doesn’t think it will be able to offer to European customers this year” due to regulatory uncertainty.

Likewise, Meta Platforms says it will “hold off on launching Meta AI in Europe after a request from Ireland’s Data Protection Commission to delay training the company’s large language models using public content on Facebook and Instagram,” WSJ writes.

With regard to anti-steering, the EC concedes that Apple allows steering, but only through a link-based system that “is ‘subject to several restrictions imposed by Apple that prevent app developers from communicating, promoting offers and concluding contracts through the distribution channel of their choice,’” according to CNBC.

The EC’s concerns are detailed in a press release that notes it now has three non-compliance investigations open against Apple with regard to developer contract terms the company implemented in response to the DMA. CNBC reports “Apple said it believes the changes it has made in the EU comply with the DMA.”

Companies found in breach of compliance with the DMA are subject to fines of up to 10 percent of their annual worldwide revenue. The fines can increase to 20 percent for repeat infringement.

In March Apple was fined $1.95 billion by EU for antitrust activities related to music streaming and has been under investigation by the EC since 2020.

Related:
EU Charges Microsoft with Antitrust Violations Over Teams Bundling, The New York Times, 6/25/24