Apple has landed itself in a tussle, as the European Union regulators have accused Apple of breaching the new digital competition rules by restricting the developers from enabling consumers to avail more affordable services.
The European Commission’s initial observation comes from an investigation that opened in March. If Apple is found guilty it could be punished and face a fine where the company will stand to lose 10% of its 383 billion dollar annual global revenue, as per the statement of EU’s executive arm on Monday. The fine can be increased to 20% if the company is found to repeat the offence.
Apple Accused Of Violating The DMA Act.
Monday’s action represents the first instance where the Commission has accused a company of violating its Significant Digital Markets Act. This legislation, effective since March, encompasses broad competition regulations designed to limit the influence of large technology firms.
The commission also launched investigations into Apple (APPL). Google’s parent company Alphabet (GOOGL) and Meta (META) parent company of Facebook under the suspicion that the companies had failed to comply with the new DMA rules.
Three companies have been singled out as “gatekeepers” by the Commission, highlighting their pivotal role in facilitating interactions between businesses and consumers through essential platform services like digital marketplaces and app stores. The Commission is set to finalize its decision on whether Apple has violated the DMA within a year of launching its investigation on March 25th.
Apple said in a statement Monday that, over the past few months, it had “made a number of changes to comply with the DMA in response to feedback from developers and the European Commission. We are confident our plan complies with the law.”
The commission had initiated another probe into Apple’s new contractual requirement for third-party app developers and whether the contract violates the DMA. At the heart of the issue is the technology fee, in the complex process users must navigate to download and install alternative app stores on iPhones, as well as the criteria developers must meet to offer alternative app stores or distribute apps directly from the web on iPhones.
The technology fee was rolled out in March and obliged major developers to pay even if they do not use any of its payment services, this has garnered criticism from the creator of ‘Fortnite’ Epic games and others.
The DMA Act
The act aims to foster competition in this new era of digital technology and also secure the interests of small tech firms when they stand against big-tech rivals.
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