CareCredit - Women's Health April 2024

Competitors Say Apple’s Plans Don’t Comply With Digital Markets Act

Digital Markets Act on smartphone

Apple is reportedly facing pushback from rivals like Meta and Microsoft over its plans to comply with the Digital Markets Act in the European Union (EU).

The tech giant is under scrutiny from regulators who are preparing to fine it 500 euros million ($541 million) for allegedly favoring its music streaming app over competitors like Spotify, the Financial Times (FT) reported Wednesday (Feb. 21).

Apple did not immediately reply to PYMNTS’ request for comment.

Apple’s proposed changes to its mobile software in Europe, such as allowing users to download apps from other sources and access alternative payment systems, are being criticized for not going far enough, according to the FT report.

The company’s App Store, which forms a significant part of its $85 billion-a-year services business, is at the center of the controversy, the report said. While Apple has announced some adjustments to its fees for app developers, including reducing the highest amount paid from 30% to 17%, critics argue that the new charges could hinder the creation of alternative app stores.

Microsoft’s gaming chief, Phil Spencer, has voiced concerns about Apple’s proposals, saying they limit the ability to create meaningful alternatives on mobile platforms, per the report.

Meta CEO Mark Zuckerberg has also criticized Apple’s plan as “onerous” and “at odds” with EU regulations, according to the report.

Epic Games and Spotify have also criticized Apple’s moves, the report said.

Developers are not pleased either, with lawyer Damien Geradin stating that many are likely to stick with the old terms rather than face the new charges, per the report.

The European Commission now faces the challenge of deciding whether Apple’s changes comply with the Digital Markets Act, according to the report. The law allows for fines of up to 10% of a company’s annual turnover for non-compliance.

This news comes two days after it was reported that Apple will disable the ability to install home screen web apps from iPhones and iPads in Europe due to the Digital Markets Act.

The Act requires Apple to allow developers to use alternative browser engines for dedicated browser apps and apps providing in-app browsing experiences, and Apple said this would create security and privacy concerns.