EU Competition Chief Suggests Apple’s Core Technology Fee May Not Be DMA Compliant

After the EU’s Digital Markets Act required Apple, Meta, Microsoft, and other tech giants to open up some of their platforms to better support competition, EU antitrust chief Margrethe Vestager suggested yesterday that Apple’s DMA changes in iOS 17.4 may not go far enough. In an interview with Reuters, Vestager pointed out Apple’s new €0.50 Core Technology Fee as something that the EU Commission could be investigating.

“There are things that we take a keen interest in, for instance, if the new Apple fee structure will de facto not make it in any way attractive to use the benefits of the DMA. That kind of thing is what we will be investigating,” Vestager said in the interview.

As a reminder, Apple’s Core Technology Fee will only apply to developers who adopt Apple’s new business terms for iOS apps distributed in the EU. The €0.50 fee will kick on for each first annual app install per year over a 1 million threshold, and this will affect apps distributed via Apple’s App Store as well as alternative marketplaces.

Many companies interested in distributing their iOS apps in other stores have already disregarded this Core Technology Fee as an anticompetitive move. Earlier this month, Epic Games, Spotify, and over 30 other companies formally complained to the EU Commission about Apple’s lack of DMA compliance. In an open letter published on Spotify’s website, these companies argued that the new fee structure in Apple’s new developer terms for the EU is “designed to maintain and even amplify Apple’s exploitation of its dominance over app developers.”

In the interview, the EU competition chief also issued a warning to companies like Apple that may be tempted to discourage users from switching to third-party services using ‘scare screens.’ Vestager said that these scare tactics, which may imply that third-party alternatives are less secure than the default option could warrant an EU investigation.

“I would think of it as unwise to say that the services are not safe to use, because that has nothing to do with the DMA. The DMA is there to open the market for other service providers to get to you and how your service provider of your operating system, how they will make sure that it is safe is for them to decide,” Vestager said. “And of course, if we see or get the suspicion that this is in order to say that someone else are not doing their job of course, we might take initiatives to look into that.”

In her interview with Reuters, the EU antitrust chief also hinted that Meta’s proposition to almost halve its ad-free subscription for Facebook and Instagram in the EU was also not DMA compliant. Meta previously argued that offering this subscription would allow EU users to avoid targeted advertising if they wanted to, but Vestager apparently believes that this isn’t enough.

“I think there are many different ways to monetize the services that you provide. Because one thing are the very targeted advertising that builds on data being consumed. Another way of showing your advertising is to make that contextual,” she said. “So I think it’s important to continue the conversation with Meta and we will assess also finally, what is the next push in order for them to be compliant with the DMA.”

Overall, it looks like the Digital Markets Act is not done causing headaches for all big tech companies that have been designated as “gatekeepers” by the EU. And companies that fail to comply with the DMA could face fines of up to 10 percent of their total worldwide annual turnover, something that’s not to be taken lightly.