According to EU officials, the technological giant inactive violates Article 5(4) of the DMA in respect of its App store App Store, limiting developers' ability to communicate with users and offer alternate purchasing channels. Apple had 60 calendar days from the date of notification to adjust its practices and to present a corrective plan. Half of that time has passed, the reservations remain.
The Digital Markets Regulation aims to guarantee fairer and more competitive conditions on digital markets. Article 5(4) of the DMA requires access guards specified as Apple to let business users (in this case application developers) to communicate free of charge and advance offers to end-users, obtained through their core platform services (such as the App Store) or another channels. Developers should besides be free to enter into contracts with these users, whether or not they usage the access defender platform services for this purpose.
The Commission in its decision examines in item the 3 sets of business conditions of Apple: first business conditions (which were in force before 7 March 2024), fresh business conditions (introduced after 7 March 2024 to allegedly adapt to DMA) and fresh business conditions for music streaming services. no of these sets were found to comply with Article 5(4) of the DMA. The Commission's main allegations focus on the limitations in the alleged "control", that is, directing users to offers outside the App Store, and on charges charged for transactions made as a consequence of specified control. The Commission notes that Apple limits the ability of developers to freely communicate and advance offers and to conclude contracts with users, and besides charges a ‘Commission Fee’ charge for transactions made after a redirection that exceeds the possible remuneration for the first acquisition of the user.
Under the first business conditions Apple completely prevented developers from any form of inside control specified as information about prices or placing call buttons to operate outside the application. fresh business conditions, although they introduce certain mechanisms of external links, inactive contain many restrictions. The Commission points out that developers can only link to their own website, utilizing only 1 link to the store and the app, without the anticipation of utilizing web views. In addition, any redirection involves showing to the user a peculiar message (the ‘disclosure sheet’), the content and frequency of which were deemed by the Commission to be unjustified, non-scientific and discouraging users. Apple besides prohibits developers from attaching additional parameters to the URL, making it impossible, for example, to pre-fill fields on the mark user data page, making its experience worse.
A key component of the fresh incompatibility is besides the mentioned "Commission Fee", which is charged to transactions executed within 7 days of clicking on the outgoing link. This fee, of 17% (or 10% for smaller developers and subscriptions after the first year), is, according to the Commission, contrary to the DMA request that the control and conclusion of contracts resulting from it be "free". The Commission argues that this charge cannot be regarded as a remuneration for the ‘initial acquisition’ of the user due to the fact that it is collected cyclically, for unlimited time, regardless of the actual acquisition of the user. akin reservations apply to fresh conditions for music streaming services, where the commission is 27% (or 12%).
Apple argued in the course of the proceeding that its explanation of Article 5(4) of the DMA was correct and that the request of ‘free of charge’ only concerns communication and promotion, alternatively than contracting. The company besides raised safety and privacy issues for users as a justification for the restrictions introduced. However, the Commission rejected these arguments, indicating inter alia the intent and legislative past of the provision and the deficiency of concrete evidence justifying restrictions on safety grounds.
As a result, Apple Inc. has been obliged to halt the infringements detected within 60 calendar days of receipt of the decision and to explain to the Commission how it intends to comply with its requirements. The company is besides to refrain from repeating any activities which infringe Article 5(4) of the DMA and from any activities having the same or equivalent intent or effect. If the decision is not complied with within the prescribed time limit, periodic punishment payments may be imposed on Apple. The European Commission's decision sends a clear signal to all digital giants with the determination of regulators to enforce fresh rules to reconstruct balance in digital markets.
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