By Hu Yun Qi
AMSTERDAM (Reuters) – The European Union's antitrust regulator said on Monday that rules on Apple Inc's App Store breach EU technology rules because they ban app developers from directing consumers to alternative services, a violation that could result in heavy fines for the iPhone maker.
The European Commission, which also acts as the European Union's antitrust and technology regulator, said it had sent preliminary findings to Apple following an investigation it launched in March.
The charges against Apple are the first by the European Commission under a landmark digital markets law aimed at curbing the power of big tech companies and levelling the playing field for smaller rivals. The Commission is due to make a final decision by March next year.
Margrethe Vestager, the European Union's antitrust chief, pointed out problems with Apple's new terms.
“As it stands, we believe these new terms do not allow app developers to freely communicate and enter into contracts with end users,” she told the conference.
The Commission said that in most of its terms and conditions, Apple only allows inducements through a “link-out”, meaning that app developers can include a link within their app that redirects customers to a web page where they can conclude a contract.
The company also criticized fees that Apple charges developers to help them initially acquire new customers through the App Store, saying they go beyond what is strictly necessary to compensate them.
Apple said it has made several changes over the past few months to comply with the DMA after receiving feedback from developers and the European Commission.
“We believe our plans comply with the law and estimate that under the new terms we have created, more than 99 percent of developers will pay the same or lower fees to Apple,” the company said in an emailed statement.
EU authorities said they would launch an investigation into the iPhone maker over new contractual requirements for third-party app developers and app stores, and whether these were necessary and adequate.
Violation of the DMA can expose companies to fines of up to 10% of their annual worldwide turnover.
(Reporting by Hu Yun Qi; Editing by Emilia Sithole Matarides)
