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Brussels is set to accuse Apple of allegedly stifling competition in its mobile apps business, the first time EU regulators have used new digital rules to target a major tech group.
The European Commission has found the iPhone maker in breach of obligations that allow app developers to “direct” users to offers outside its App Store without charging them, according to three people familiar with the details of its investigation.
The charge would be the first brought against a tech company under the Digital Markets Act, landmark legislation designed to force powerful “online gatekeepers” to open up their businesses to competition in the EU.
The Commission, the EU’s executive arm, said in March it was investigating Apple, as well as Alphabet and Meta, under powers granted to the DMA. An announcement about charges against Apple is expected in the coming weeks, two people with knowledge of the case said.
The people said regulators made only preliminary findings and Apple could still take steps to correct its practices, which could then lead regulators to reconsider any final decision. They added that the timing of any announcement may also shift.
The EU could also decide to bring charges against other tech groups, with regulators still investigating whether Google parent Alphabet favors its own app store and Facebook owner Meta to use personal data for advertising.
If Apple is found to be in violation of the DMA, it faces daily non-compliance penalties of up to 5 percent of its average daily global turnover, currently just over $1 billion.
The move comes at a time when competition watchdogs around the world are increasing their scrutiny of Big Tech companies and their market dominance. In March, the United States launched antitrust proceedings against Apple for allegedly using its power in the smartphone sector to suppress competitors and limit consumer choice.
Epic Games, which sued Apple over the App Store in 2020, is also awaiting a ruling from a California federal judge on whether Apple failed to comply with a US court order banning its operating rules after a series of court hearings in recent weeks.
In January, Apple announced historic changes to its iOS mobile software, App Store and Safari browser in the EU.
The changes were an effort to appease regulators in Brussels and meant that Apple would allow users to access competing app stores and download apps from other sources. The changes also included a reduction in fees paid by companies using the App Store to sell digital goods and services from 30 percent to 17 percent.
However, the EU is also looking into whether these fee changes are properly aligned with its new digital rules. Apple has introduced new fees in Europe, including a 50-cent “core technology fee” for app developers that have more than 1 million users for each user’s first installment. Apple will also charge an additional 3% fee to app developers who use its payment processor.
Some developers have argued that they could face higher fees as a result of the fee changes. The EU could also announce initial fees for those developer fees, people familiar with the commission’s thinking said.
According to an analysis by Sensor Tower, consumer spending on Apple’s App Store was “relatively flat” during the second quarter of 2024, suggesting that EU rules have not yet affected the company’s bottom line.
Apple declined to comment, but pointed to an earlier statement saying, “We are confident that our plan is compliant with the DMA and will continue to engage constructively with the European Commission as they conduct their investigations.”
The EU declined to comment.