Apple has been hit by a €500m (£429m) fine from the European Union for violations of its Digital Markets Act (DMA) – and Fortnite maker Epic Games, which has been warring with the iPhone manufacturer amidst the rollout of its own app store, has been quick to respond.
Today, both Apple and Facebook owner Meta have been handed the first major penalties to come from the DMA. Apple has been slapped for App Store practices. Meanwhile, Meta must pay €200m (£172m) over its advertising policies.
Issues with Apple’s App Store centre on the company’s policy of not allowing iPhone and iPad apps to mention or link to alternative storefronts or offers elsewhere – meaning customers are directed to spend solely via the App Store, where Apple takes its 30 percent cut.
This was a key issue behind Epic Games’ original beef with the iPhone maker, when it launched the first strike in its now years-long war with both Apple and Google by slipping cheaper, direct payments into Fortnite (and swiftly getting booted from the App Store and Google Play as a result).
Apple has always argued that its baked-in storefront was the most secure option for users, and that opening up its systems to alternatives posed risks to itself and to customers. The company has said today it will appeal the decision.
“Under the DMA, app developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases,” the European Commission wrote today, announcing its verdict.
“The Commission found that Apple fails to comply with this obligation. Due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store. Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers. The company has failed to demonstrate that these restrictions are objectively necessary and proportionate.”
On top of its fine, Apple has now been ordered to “remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future” within 60 days, or risk further fines.
And there’s further bad news today for Apple as the European Commission has issued its preliminary findings on the company’s “user choice obligations”, as well as its controversial Core Technology Fee – essentially a tax on major app store developers who choose to publish their games on alternative iPhone storefronts in regions (such as the EU) where Apple has been compelled to allow them.
“The Commission takes the preliminary view that Apple failed to comply with this obligation in view of the conditions it imposes on app (and app store) developers,” it wrote. “Developers wanting to use alternative app distribution channels on iOS are disincentivised from doing so as this requires them to opt for business terms which include a new fee (Apple’s Core Technology Fee).
“Apple also introduced overly strict eligibility requirements, hampering developers’ ability to distribute their apps through alternative channels. Finally, Apple makes it overly burdensome and confusing for end users to install apps when using such alternative app distribution channels.”
These findings have now been passed to Apple, before further action is taken.
Eurogamer has contacted Apple for comment.
“Apple is breaking the law by imposing illegal fees, scare screens and restrictions on purchases made outside the App Store,” Epic Games said in a statement today, meanwhile. “Apple’s pattern of malicious compliance must end the following technical and commercial restrictions:
“Apple must allow apps downloaded from the App Store to steer customers to third party stores. Apple must not charge any fees on purchases that are made outside of an app. Apple must eliminate restrictions on the language, style and flow that developers can use to link to their website or to access an alternative payment system. In simple words: Apple must end the scare screens they pop up in front of Epic Games Store to deter customers from doing business with us.
“Apple must not track, surveil, or require developers to send Apple data about purchases that consumers make outside apps. Apple must allow developers to advertise lower prices and communicate directly with their customers.”
Back in January, the UK’s Competition and Markets Authority announced a similar investigation into both Apple and Google, backed by fresh powers granted under the recent Digital Markets, Competition and Consumer Act.
