EU sets final countdown for Apple to comply with Digital Markets Act

The big picture: Apple and the European Commission are locked in a standoff over how tech firms should be regulated – a conflict being closely watched by the tech industry, app developers, and consumer advocates. The outcome could set a precedent for how digital marketplaces operate, not only in Europe but globally, as other jurisdictions consider similar measures to promote competition and curb the power of tech giants.

Apple is facing a critical deadline in the European Union, with fewer than 30 days remaining to overhaul its App Store practices or face additional financial penalties from the European Commission. The warning follows the Commission’s determination that Apple’s current policies continue to violate the Digital Markets Act (DMA), a sweeping regulation aimed at curbing the power of major tech platforms and fostering greater competition in digital markets.

At the heart of the dispute are Apple’s longstanding restrictions that prevent app developers from informing users about alternative ways to purchase digital goods or subscriptions outside the App Store. Under the DMA, companies designated as “gatekeepers” must allow developers to communicate freely with customers about external offers and payment methods, without imposing barriers or excessive fees.

The Commission found that Apple’s rules – including so-called “anti-steering” provisions and technical barriers – made it unnecessarily difficult for developers to direct users to external payment options.

In April, the European Commission fined Apple €500 million (about $569 million) for these violations and ordered the company to remove the restrictions. Apple was given a 60-day window to comply, with less than a month now remaining before the June 22 deadline. If Apple fails to meet the requirements, the Commission has made it clear it will impose additional periodic fines, which could reach up to five percent of Apple’s daily global revenue until compliance is achieved.

Despite some changes to its App Store policies in the EU, including allowing developers to include a single external link to their own websites, regulators say Apple’s approach still falls short. Developers must use Apple’s format for these links, display warnings to users about leaving the Apple ecosystem, and pay a 27 percent commission on purchases made through external links – only slightly less than the standard 30 percent fee for in-app transactions.

The Commission argues that these measures “undermine the effectiveness” of the DMA and continue to restrict competition.

Apple has strongly objected to the Commission’s findings and the size of the fine, arguing that the requirements threaten user privacy and security and effectively force the company to give away its technology for free. In a statement, Apple called the decision “bad for innovation, bad for competition, bad for our products, and bad for users.” The company has signaled its intention to appeal the ruling, but must still comply with the Commission’s order while the legal process unfolds.

The European Commission, for its part, maintains that Apple’s privacy and security concerns are not substantiated, and that the DMA’s goal is to ensure consumers and developers benefit from real choice and fairer digital markets. The law, which took effect in 2023, is part of a broader push by EU regulators to curb the dominance of large tech firms and open up their platforms to greater competition.