Apple’s European Headache

Margrethe Vestager, the European Union’s competition chief, called the bloc’s charges against Apple a “very important” moment for policing market abuses in the digital age.Credit…Pool photo by Francisco Seco, Reuters.

The E.U. bites into Apple

Apple’s feud with global regulators escalated after the European Union on Monday charged the iPhone maker with stifling competition on its App Store, a breach that carries potentially big penalties and could upend a hugely profitable area of the tech giant’s business.

The $3 trillion company is the first to be charged under the Digital Markets Act, a landmark 2022 E.U. law that was designed to reduce the dominance of six mostly American “online gatekeepers.” Of those, Amazon, Google and Meta are also under investigation, and The Financial Times reports that Microsoft could face charges tied to its market dominance.

Here are the E.U.’s accusations against Apple:

• The App Store violates so-called steering rules. Regulators say that app developers cannot easily inform their customers about new offerings, including cheaper deals, within Apple’s ecosystem.

• The fees Apple charges are excessive.

• The bloc is also investigating Apple again for noncompliance, including over a core technology fee that equates to a half-euro charge per user download.

Apple is facing a slew of regulatory hurdles at home and abroad, as the company plays catch-up in the artificial intelligence race. On Friday, Apple said it would delay rolling out new A.I. products and services in Europe because of “regulatory uncertainties.”

And the company already faces a $2 billion E.U. fine for impeding competition in the music streaming sector.

The clash is a big test for the Digital Markets Act. Under the D.M.A., fines can run as high as 20 percent of global revenue, which last year topped $380 billion at Apple. Repeat abuses would give the European Commission, the bloc’s executive arm, the additional power to force a divestment or sale.

“We are determined to use the clear and effective D.M.A. toolbox to finally open real opportunities for innovators and for consumers,” Thierry Breton, the E.U.’s internal market commissioner, said.