Apple Faces EU Heat Again: Violating the Digital Markets Act (DMA)?

Apple appears to be embroiled in another antitrust battle with the European Union (EU). Margrethe Vestager, the EU's competition chief, raised "very serious issues" regarding Apple's compliance with the DMA, a law aimed at curbing the dominance of big tech companies.

Vestager's Concerns:

In a CNBC interview, Vestager expressed surprise at Apple's potential non-compliance with the DMA. "[Apple] are very important," she stated, highlighting the App Store's role in facilitating digital commerce. "But of course, we will enforce [the DMA] with the same top priority as with any other business."

Potential Penalties:

If Apple's App Store practices are deemed to violate the DMA, the company could face a hefty fine – 10% of its global annual revenue – while investigations continue. This comes on the heels of a separate €1.8 billion fine imposed by the EU in March 2024 for unfairly restricting music streaming services like Spotify from informing users about alternative subscription options outside the App Store.

Why the Scrutiny? Examining Apple's App Store Practices:

The EU is investigating several aspects of Apple's App Store:

• Anti-steering policies: Are they hindering user choice by preventing developers from promoting external subscription options?
• App removal and customization: Does Apple limit user control over installed apps and default settings on iOS devices?
• Browser and search engine choice: Does Apple restrict user freedom to choose alternative browsers and search engines?

The DMA's Mandate:

The DMA categorizes dominant tech companies like Apple as "gatekeepers," subject to specific regulations. These include:

• Allowing users to install third-party app stores and apps
• Enabling easy removal of pre-installed apps
• Providing options to change default settings on iOS devices
• Giving users control over personalized advertising

Focus on In-App Purchases:

The DMA specifically addresses Apple's previous anti-steering practices, requiring gatekeepers to allow developers to inform users about alternative in-app purchases outside their app stores.

Consequences of Non-Compliance:

The EU can impose significant penalties for DMA violations:

• Fines of up to 10% of global annual revenue (20% for repeat offenses)
• Daily penalty payments
• Potential company restructuring/dissolution

The Global Trend of Regulating Big Tech:

Apple's case highlights the growing global movement towards regulating Big Tech practices. Similar initiatives are underway in India, with the government exploring the implications of a draft Digital Competition Bill.

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