In this photo illustration, the Apple logo is displayed on a smartphone with the European Union flag in the background.
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European Union regulators said on Monday that Apple violated sweeping new technology rules by not allowing its App Store customers to switch to alternatives.
The European Commission, the EU’s executive agency, also said it has launched a new investigation into Apple’s new contract terms with developers.
The EU launched an investigation into Apple, Alphabet and Meta in March under a landmark new law called the Digital Markets Act (DMA), which aims to weaken the power of big tech companies. The so-called anti-steering rule is one of the focus areas of the investigation. Under the DMA, tech companies are not allowed to prevent businesses from telling users about cheaper options for their products or subscriptions outside of app stores.
On Monday, the regulator said in preliminary findings that Apple violated the DMA because its App Store rules “prevent app developers from freely directing consumers to alternative channels for offers and content.”
CNBC has reached out to Apple for comment.
According to the committee, Apple only allows bootstrapping through a system in which app developers can provide a link that sends users to a web page where they can then purchase content, such as a subscription. However, the committee noted that this process is “subject to multiple restrictions imposed by Apple that prevent app developers from communicating, promoting offers, and entering into contracts through their chosen distribution channels.”
The regulator also said Apple charges developers “more than is strictly necessary” to acquire new customers for the first time through the App Store. The committee did not disclose what “absolutely necessary” costs were.
If Apple is found to have violated the DMA, it could face fines of up to 10% of the company’s global annual turnover.
The U.S. tech giant has been in the EU’s crosshairs this year. In March, regulators slapped Apple with an antitrust fine of 1.8 billion euros ($1.93 billion) for abusing its dominant position in the market for distributing music streaming apps. Steering rules are also a focus of the investigation.
EU launches another DMA investigation
In preparation for DMA, Apple made some major changes to its App Store in the EU this year. Cupertino Giants Now Allow Download apps from the website and third-party app stores on your device.
But the committee also expressed concerns about some of Apple’s new practices.
Apple still charges a “core technology fee” of 50 euro cents ($0.54) for every app downloaded outside its own App Store. The committee said it was investigating whether this was consistent with the DMA.
Regulators are also examining whether Apple’s steps to require users to download alternative app stores or apps comply with EU rules.
The committee will also examine whether “eligibility requirements related to the provision of alternative app stores or the ability to distribute apps from the Internet directly on the iPhone” are also consistent with the technology law.
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