European Commission cautions Apple over App Store practices, points to potentially large fines
Date
6/25/2024 6:11:09 AM
(MENAFN) On Monday, the European Commission issued a preliminary opinion indicating that Apple’s App Store may face significant financial sanctions for allegedly violating European Union competition rules. The Commission's statement suggests that the App Store's current regulations contravene the digital markets system by restricting app developers from directing consumers to alternative distribution channels for offers and content.
This opinion is the first to be issued under the new competition rules of the digital markets system, which became mandatory on March 7. It follows an investigation initiated on March 25. Apple is now afforded the opportunity to review the file and defend itself by responding in writing to these preliminary findings.
Should these conclusions be upheld, the European Commission is expected to finalize its decision on Apple's non-compliance by the end of March 2025. This could result in a substantial fine for Apple, potentially amounting to 10 percent of its global revenues, and escalating to 20 percent for repeated violations. Given that Apple's revenues for the 2023 fiscal year, which ended in September, totaled $383 billion, such fines could be considerable.
The Commission emphasized that, under the digital markets system, companies distributing their applications via the App Store should be able to inform customers about alternative, less expensive purchasing options, direct them to these offers, and facilitate such purchases. This directive aims to ensure fair competition and consumer choice, countering the monopolistic tendencies that the Commission attributes to Apple's current App Store practices.
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