Report from Politico
In Brief – Apple has appealed the €500 million fine imposed by the European Commission for failing to comply with the Digital Market Act (DMA), calling the penalty “unprecedented” and arguing that the regulator’s demands for changes to its App Store are “unlawful.” The appeal focuses on two substantive issues that were part of the App Store changes it announced on June 26: the allegation that the Commission forced Apple to offer tiers of services to app developers and that it adopted an “unlawful” expansion of the definition of “steering.” On the App Store tiers, the company argues that the regulator is “mandating how we run our store and forcing business terms which are confusing for developers and bad for users.” On steering, Apple contends that the Commission has broadened the definition beyond that established under the DMA, now including in-app promotions, alternative payment services, and demands for links to competing app marketplaces. The Commission, which is reviewing Apple’s June proposal, indicated that it “stands ready to defend its decision in court.”
Context – Apple, Google, and Meta were the first “gatekeeper” companies investigated under the DMA. The regulator objected to Apple’s App Store rules and fees, argued that Meta’s ad-free subscription plans for Facebook and Instagram do not offer users adequate choice for targeted advertising, and required Google to improve the treatment of specialized “vertical” search businesses in its search engine. Like Apple, Meta is appealing the Commission’s DMA decision and €200 million fine, arguing that requiring it to offer free services with less personalized ads, which are less valuable to advertisers and earn much less revenue for the platform, violates the European Court of Justice’s ruling that offering a paid subscription is an acceptable form of user consent to online advertising, and singles out Meta for negative treatment. Finally, Google continues to offer alternative search engine result page layouts to satisfy the Commission, vertical services providers, and large online advertisers like airlines and hotel chains.