Apple Inc. today appealed a €500 million fine that it had received in the European Union last year over the App Store’s terms of service.
The company filed the challenge with the General Court, the bloc’s second highest court.
EU officials fined Apple last April under a piece of legislation called the DMA, or Digital Markets Act. The law applies to large tech firms that are found to have so-called gatekeeper status in the segments where they compete. Apple received that designation in 2023.
One of the DMA’s provisions specifies that companies can’t prevent app developers from processing payments using a third-party service. The EU fined Apple because officials determined that it breached this requirement.
The iPhone maker provides a payment system that iOS developers can use to process in-app purchases. If they don’t wish to use the system, they may direct users to a third-party alternative. Until recently, Apple imposed restrictions on how developers may do so. For example, apps weren’t allowed to specify the price of a subscription sold through a third-party website.
Apple changed its terms of service in June to comply with the DMA. The company is appealing the EU’s fine partly because it has taken issue with changes it was required to implement.
“We believe the European Commission’s decision — and their unprecedented fine — go far beyond what the law requires,” an Apple spokesperson said. “As our appeal will show, the EC is mandating how we run our store and forcing business terms which are confusing for developers and bad for users.”
Apple rolled out a two-tier fee structure for in-app purchases as part of the June update to its terms of service. The first tier charges developers a 5% “store services fee” for access to core App Store capabilities. The second tier increases the commission to 13% in exchange for additional features such as the ability to offer promo codes.
The company also applies several other charges to in-app purchases. There’s a base App Store commission of up to 17%, as well as two fees that are tied to app installations. It charges either €0.50 or €1 per download depending on the popularity of a service.
According to Bloomberg, the company’s appeal argues that the new two-tier fee structure creates unnecessary complexity for developers. Additionally, Apple charges that the EU “unlawfully expanded the definition of steering,” or the practice whereby developers direct users to third-party services. The company is also expected to raise the point that other app store operators are not subject to similar requirements.
An EU spokesperson told The Register that the European Commission, the bloc’s executive arm, “will defend our position in court.”
Photo: Unsplash
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