On Monday, the European Commission opened a non-compliance investigation into whether Apple is fully complying with the rules brought into force by the EU’s Digital Markets Act. If not, Apple faces potentially hefty fines.
Mac-maker does not stand out. The EC also opened similar investigations against Alphabet/Google and Meta/Facebook.
EU Digital Markets Law vs. US Big Tech
The purpose of the Digital Markets Act of the European Union is to open up Big Tech to greater competition. But it seems that US-based companies need to change their business practices. The European Commission has none of that.
“We suspect that the solutions proposed by the three companies are not fully compliant with the DMA,” Margrethe Vestager, executive vice president in charge of competition policy, said in a statement. “We will now investigate companies’ compliance with the DMA to ensure open and competitive digital markets in Europe.
EU investigates Apple’s sideloading rules for non-compliance with DMA
One of the provisions of the DMA requires Apple to stop blocking competitors in the iPhone App Store and allow sideloading of third-party software.
The EC’s statement announcing its non-compliance investigations says:
“Apple’s new fee structure and other terms and conditions for alternative app stores and web app distribution (sideloading) may defeat the purpose of its obligations under Article 6(4) DMA.”
Initially, Apple did not allow sideloading of iPhone apps — they had to come from an alternative software market. This rule has since been dropped, and some of the stricter requirements for competitive markets have been removed. Whether these changes will satisfy the EC remains to be seen.
Also, the European Commission is investigating whether Apple is following the DMA’s request to allow third-party software developers to “direct” consumers to offers outside the App Store, free of charge.
The EU is also looking into Apple’s browser selection rules
The EU’s Digital Markets Act also requires iOS to support alternative browser engines. But the EC said on Monday:
“The Commission has opened proceedings against Apple in relation to its compliance measures to (i) allow end users to easily uninstall any software application on iOS, (ii) easily change default settings on iOS, and (iii) require users with selection screens that must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.”
Alphabet and Meta are also under investigation
In addition, the European Commission is investigating whether Alphabet is using its Google search engine to send users to its own services at the expense of competitors. And the Commission wants to make sure that the Play Store also freely allows app developers to direct customers to their own websites.
In addition, Meta is being investigated to see if its new policy of asking users for permission before combining personal data collected from its various services follows all the dictates of the DMA.
Just an investigation… for now
An investigation is not an indictment. At the moment, the European Commission is only investigating whether Apple — and Alphabet and Meta — are violating provisions of the Digital Markets Act.
But if the investigation results in Apple or one of the other big tech companies breaking the rules, there could be serious financial consequences.
Thierry Breton, EU Commissioner for the Internal Market, warned:
“We are not convinced that the solutions of Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and companies. If our investigation concludes that there is not full compliance with the DMA, the gatekeepers could face heavy fines.”
To be clear, the changes Apple was supposed to make only apply to residents of the European Union. All others are still limited to Apple’s App Store.