EU Preliminarily Finds Apple in Violation of DMA for Prohibiting Developers from Informing Users of External Purchase Options

For developers, selling software and services through Apple's AppStore comes with many restrictions. Besides needing to pay a 30% commission (now 15% for small developers), developers are also prohibited from informing users within the app that they can purchase through websites or third-party platforms, as this would violate the developer guidelines.

Take the example of some video streaming services' memberships. If activated through the AppStore, the membership might cost 25 CNY per month, whereas direct purchases through the website might only cost 20 CNY.

For consumers, naturally, the cheaper method of subscription is preferable. However, developers are not allowed to notify users within the app that cheaper subscriptions are available through the website, unless users discover this option and act on it themselves.

The European Commission has officially announced its preliminary findings, determining that Apple's policies regarding its app store violate the Digital Markets Act (DMA), specifically concerning anti-circumvention rules.

According to the DMA, developers distributing applications through the AppStore should be able to inform consumers of cheaper purchasing options, guiding users to buy products or services through these methods.

The EU believes Apple's commercial terms with developers prevent this practice. These terms stipulate that developers may not provide pricing information within the app or communicate with customers in any other way to promote offers available through other distribution channels.

In an official press release, the EU stated:

Developers' process of directing customers via links is subject to multiple restrictions imposed by Apple, which prevent developers from communicating, promoting offers, and entering into contracts through their distribution channels of choice.

The fees Apple charges for attracting new users through the AppStore exceed the strictly required scope for such remuneration (referring to the referral commission), e.g., developers are still required to pay Apple a commission for every item and service purchased by a user clicking a referral link seven days later.

Moreover, the EU is also concerned about Apple's new contractual requirements for third-party app developers and app marketplaces, namely the 0.5 EUR per transaction core technology fee, which does not ensure Apple's effective compliance with the obligations under the DMA.

Following the preliminary findings of the investigation, the European Commission will take further actions. If Apple is ultimately found in violation, it could face significant fines from the EU.

The EU has sent its preliminary findings to Apple. According to the EU's planned timetable, if Apple is found in violation, the final results will be published in March 2025.

Apple responded to the matter, stating:

Over the past few months, Apple has made numerous changes in response to feedback from developers and the EU to comply with DMA requirements. We believe these changes are in line with legal requirements, and under the new commercial terms, over 99% of developers will pay Apple the same or less.

All developers conducting business in the EU through the AppStore have the opportunity to use our newly introduced features, including directing users to the web to complete purchases at competitive prices.