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Apple (NASDAQ:AAPL) has appealed a €500M ($580M) fine from the European Commission, for allegedly breaching the region’s Digital Markets Act, calling the penalty “unprecedented” and the regulator’s required changes to its App Store as “unlawful,” Bloomberg News reported.
In April, the EU regulator said Apple breached its anti-steering obligation under the DMA. Last month, Apple announced changes to its App Store for users in EU nations to comply with the DMA. The company said developers with apps in the EU storefronts of the App Store can promote offers for purchase of digital goods or services available at a destination of their choice.
“We believe the European Commission’s decision — and their unprecedented fine — go far beyond what the law requires,” Apple said in a statement, the report added. “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 did not immediately respond to a request for comment from Seeking Alpha.
Under the App Store changes in June, Apple unveiled a tiered commission structure of either 5% or 13% — on top of a 2% user acquisition fee — depending on if they want their app to show up in App Store search suggestions, promotional material or have the ability to receive automatic updates, the report noted.
The U.S. tech giant said that regulators demanded the new tiered approach in the EU, which it maintains is confusing for users and developers. The company also noted that no other app download store is subject to such a structure, according to the report.
The company now more freely allows developers to promote out-of-app payment processing for digital goods, avoiding some of its fees. Apple also noted that the Commission unlawfully expanded the definition of steering, meaning that developers could direct users to make transactions elsewhere in more cases, the report added.
Last month, Apple noted that it is challenging an order from the European Commission directing it to make its operating system, iOS, more compatible with competitor tech companies’ products under the DMA.
In April, Meta Platforms (META) was also fined for €200M for allegedly breaching the DMA.
In September 2023, the European Commission designated for the first time six gatekeepers — Alphabet, Amazon (AMZN), Apple, Meta, Microsoft (MSFT) and Chinese tech giant ByteDance (BDNCE) — under the DMA. Certain products provided by these companies come under the DMA and the EU’s Digital Services Act, or DSA — which regulates online intermediaries and platforms that millions of Europeans use every day. The DSA protects consumers and their rights online.