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EU accuses Apple of breaking its new digital rules

By Earle Gale in London | China Daily Global | Updated: 2024-06-25 06:31

Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France on July 15, 2020. [Photo/Agencies]

European Union regulators have accused the United States technology giant Apple of breaking the 27-nation bloc's digital competition rules, opening the door to the prospect of the company having to pay a huge fine.

The European Commission, which is the bloc's executive and also its antitrust and technology regulator, said on Monday the preliminary findings of an investigation launched in March had shown Apple prevented app developers from directing the company's 2.2 billion active consumers toward cheaper, rival services.

The bloc has informed the company about its preliminary findings and launched a more detailed probe that must end by March 2025.

If the company is ultimately found guilty, it could be fined up to 10 percent of its global revenue, which stood at $383 billion in 2023. If it then repeated its alleged indiscretion, it could be fined up to 20 percent of its global revenue.

The alleged infringement of the EU's Digital Markets Act, or DMA, marks the first time the bloc has pursued such a case since the legislation was introduced in 2022 in a bid to promote competition in the technology sector and remove advantages enjoyed by so-called Big Tech companies.

The Financial Times quoted Thierry Breton, the EU's internal market commissioner, as saying: "Apple's new slogan should be 'act different'. Today we take further steps to ensure Apple complies with the DMA rules."

The regulator is also investigating whether Apple's developer fees, which require companies to pay 50 cents per download to Apple if their app is used by more than 1 million people, are in breach of its DMA rules.

The EU said the fees could also be interpreted as a barrier blocking users from easily downloading and installing alternative apps.

Reuters quoted Apple as saying it had "made a number of changes to comply with the DMA in response to feedback from developers and the European Commission".

"We are confident our plan complies with the law," the company said.

Apple made those changes in January, to its mobile software, app store, and search engine. But the EU's antitrust chief, Margrethe Vestager, said the bloc is not yet convinced the company has gone far enough.

"As they stand, we think that these new terms do not allow app developers to communicate freely with their end users, and to conclude contracts with them," she said.

Apple said on Friday the DMA had also prompted it to delay the introduction of artificial intelligence features on its phones.

The company's latest EU legal woes follow it being fined 1.8 billion euros ($1.9 billion) earlier this year, for allegedly stifling competition in relation to its music-streaming services. The company is currently appealing that ruling in the EU's courts.

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