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Tuesday, July 23, 2024

EU accuses Apple of breaking rules on its App Store

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In Short:

Apple has been charged by the EU for breaking new digital market rules by limiting developer communication with users and promotions in the App Store. The EU claims Apple suppresses competition and consumer choice. Apple denies any wrongdoing and faces fines if found guilty. Apple’s decision to not release AI features in the EU due to regulatory concerns is also affecting innovation in the tech industry.

Apple has been charged by the European Commission for violating the new digital markets rules of the European Union. This comes just after the tech giant announced it would not release artificial intelligence features in the EU due to regulatory concerns.

Violation of Anti-Steering Practice

The European Commission pointed out that Apple’s App Store was restricting developers from directly communicating with users and providing offers, a practice referred to as anti-steering. Margrethe Vestager, the EU’s competition chief, stated, “Our preliminary finding is that Apple does not fully allow steering, which is essential for app developers to reduce dependence on app stores and for consumers to be informed about better deals.”

Thierry Breton, the European commissioner for the internal market, expressed a stronger criticism, accusing Apple of stifling innovation and limiting consumer choices.

Legal Process and Consequences

The EU termed the charges as “preliminary findings” and Apple now has the opportunity to respond. If a resolution is not reached, the EU can impose fines of up to 10 percent of the company’s global turnover by March 2025.

Background and Previous Investigations

The tensions between Apple and the EU have been escalating for some time, with Brussels launching an investigation in March over Apple’s failure to comply with competition rules. While Meta and Google-parent Alphabet were also investigated, the focus has been on Apple’s dealings with European developers.

Company’s Response and Concerns

In response, an Apple spokesperson expressed confidence in the company’s compliance with the law, stating that all developers on the App Store in the EU have the option to utilize the introduced capabilities.

Furthermore, Apple recently announced the postponement of its artificial intelligence features in the EU this year due to regulatory uncertainties involving privacy and data security concerns related to the Digital Markets Act.

Impact on Industry

Several tech companies have cited the new EU rules as reasons for delaying the launch of new features. Google delayed the roll out of ChatGPT, Meta paused AI training on personal data, and Apple ceased the release of iPhone Mirroring, SharePlay Screen Sharing enhancements, and Apple Intelligence in the EU.

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