Source: Finance Association
Author: Shi Zhengcheng

The European Commission issued an announcement on Monday stating that after investigation, it was initially determined that Apple's App Store (App Store) of the United States is suspected of violating the Digital Market Act. This also enabled consumer electronics giants to take the “first bullet” fired by EU antitrust agencies after the law came into effect in March of this year.

As an unexpected development, the European Union also announced an investigation into the Apple App Store's collection of “core technical fees” and the complicated steps for iPhone users to download apps from third-party channels.

Will face fines of up to 10% of global annual revenue

The EU's “Digital Market Act” came into effect on March 7 this year. The six “gatekeeper” platforms Apple, Amazon, Microsoft, Alphabet (Google's parent company), Meta, and ByteDance are required to ensure that their core platform services fully comply with the obligations of the Digital Market Act.

Because of this, in the month the new law came into effect, the European Union announced that it would launch an investigation into the violation of regulations on Apple and Google's App Stores, as well as Google Search, Meta advertising model, and Apple Safari. Therefore, today's progress is roughly within the range expected by the market.

The European Union said in a statement that according to the Digital Market Act, developers distributing apps through the Apple App Store should be able to notify customers of cheaper alternatives free of charge and guide them to choose these offers.

However, an EU investigation found that Apple does not allow developers to freely guide their customers in a number of rules governing app stores. For example, developers cannot provide pricing information within the app, nor can they promote offers from third party channels to customers in any way.

Also, according to the terms applicable to most developers, Apple only allows the “link redirection” method, where the developer places a link in the app and redirects the customer to an external web page to make a purchase. This redirection process is subject to a number of rules imposed by Apple, which in turn prevents developers from promoting and promoting through channels of their choice.

The EU further stated that although the law allows the Apple App Store to charge for enabling developers to acquire customers, the fees charged by Apple clearly exceed the necessary scope. For example, Apple will charge developers for digital goods and services purchased within one week after the user is redirected from the link.

According to regulations, Apple now needs to review the committee's findings and make an official response. According to the schedule, the European Commission is likely to make a final decision before the end of March 2025. If Apple is eventually found to be in violation, it will face a fine of up to 10% of global annual revenue. In the case of repeat offenses, this fine can reach up to 20%.

Of course, if Apple can make changes that meet the requirements of the rules, it will naturally be able to avoid fines. EU antitrust agency head Vestag said on Monday that the current position is that Apple should decide for itself how to meet the requirements of the Digital Market Act, rather than the EU telling them what to do.

However, Apple doesn't seem to agree much with the EU's opinion. In response to the media, company spokesperson Julien Trosdorf said, “We believe our plan complies with the law. It is estimated that more than 99% of developers will pay the same or less to Apple under our new terms of business.”

“Core technology costs” have certainly been investigated

The European Union also announced on Wednesday that it has officially launched a new illegal investigation into the “Core Technology Fee” (Core Technology Fee) introduced by Apple to the EU market and whether the “multi-step process” of Apple users using third-party app stores on iPhones complies with the Digital Market Act.

The focus of this controversy has also previously reported that for developers trying to bypass the App Store, Apple has prepared another form of fee — software that is downloaded more than 1 million times a year. Every year, when users install software for the first time, developers have to pay 0.5 euros to Apple. It is important to note that installing software updates is also counted as a number of times, so this amount is equivalent to the annual fee that app developers need to pay to Apple on a regular basis according to the number of customers.

In simple terms, for an app that is installed 10 million times a year, developers need to pay 4.5 million euros of “core technical fees” per year. Naturally, this charging method has also sparked huge controversy in the developer community. Naturally, many developers who are afraid of going bankrupt due to this fee choose to stay in the App Store.

Fight against escalation: “Apple Smart” becomes a bargaining chip

What is quite a “coincidence” is that while the market is waiting for the EU to launch the “first shot of the Digital Market Act,” Apple took the lead — the company said on Friday that it would not be able to release the personal intelligence system “Apple Intelligence”, “iPhone Mirroring” on Macs, and the “SharePlay Screen Sharing” feature in FaceTime calls to EU users this year.

Apple also clearly blamed the Digital Markets Act. Apple pointed out that the Digital Marketplace Act forced it to reduce the security of its products and services, causing “uncertainty” to the company.

Editor/Jeffy