Apple faces a new EU antitrust complaint from two civil rights groups over restrictive App Store and device terms

Apple is once again under fire in Europe. The company faces a new EU antitrust complaint from two civil rights groups over restrictive App Store and device terms and regulations that allegedly violate the Digital Markets Act (DMA).

The complaint alleged that Apple limits competition and consumer choice by making it difficult for users and developers to use or switch to third-party apps and services. Additionally, the groups argued that these practices lock users into AAPL’s ecosystem, making it tough for smaller developers to compete.

Complaints towards Apple over the EU’s  Digital Markets Act 

The complaint focuses on Apple’s rules for iOS and iPadOS. They both target restrictions on the installation and use of third-party software apps and app stores, which the groups claim harm business users and end users in breach of the DMA. 

The civil rights groups pointed out a standby letter of credit (SBLC) of 1 million euros required from developers who want to develop apps for distribution in Apple’s App Store or who want to install a third-party app store as a native app in Apple’s iOS and iPadOS.

“A 1,000,000 euro SBLC can impose a recurring annual cost and collateral requirements that many SMEs cannot meet,” cited the 16-page complaint.

To that end, the groups urged the Commission to impose a fine on Apple. DMA penalties can be as much as 10% of a company’s global annual revenue, and it may be forced to make changes to how it operates its App Store and software ecosystem in Europe.

The DMA came into force earlier this year to curb the power of so-called gatekeepers, or large tech platforms that control key digital services such as app stores, browsers, and messaging tools.

The law sets out strict dos and don’ts for giant firms like Apple, Google, Amazon, Meta, and Microsoft. It is designed to prevent them from favouring their own products or locking in users. Apple’s App Store has long been at the centre of competition scrutiny on both sides of the Atlantic.

This is another legal setback for Apple, which was fined $583 million in April for breaching the same EU law. In response, the iPhone maker appealed the decision in June and has since been working to resolve the dispute with regulators.

During recent court hearings, Apple’s lawyer Daniel Beard argued that the DMA places “hugely onerous and intrusive burdens” on the company and conflicts with its rights in the marketplace. As reported by Cryptopolitan, Apple challenged the law, arguing that it compromised security and provided a worse user experience, and the EU’s move to investigate whether iMessage should also follow the same rules.

Meanwhile, Apple stock has a moderate buy consensus rating, based on 20 buy, 12 hold, and three sell recommendations assigned in the last three months. At $255.81, the average AAPL stock price has declined by 6% in the last day.

US tech giants under monopoly scrutiny

Apple is facing growing pressure from global regulators over its App Store rules. In the US, the Department of Justice has accused the company of maintaining an unlawful monopoly over the smartphone market. Additionally, the UK’s Competition and Markets Authority (CMA) is also probing its commission structure and alleged restrictions on developers.

However, it is not the only tech giant on the edge. Earlier this year, the Institute for Public Policy Research (IPPR) warned that Apple and Google’s 30% commissions on in-app payments were costing UK developers between £1.5 billion and £2.4 billion annually.

Also, in Washington, Google’s parent company, Alphabet, was accused of maintaining a monopoly in online search through exclusive deals with Apple and Samsung. But it recently secured a partial reprieve after a federal judge, although the court still ordered Google to share search data with rivals and relax exclusivity clauses.

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