Apple appeals the "unprecedented" €500 million EU App Store fine
Apple Inc. has appealed the €500 million fine imposed by the European Union, claiming that the penalty is "unprecedented" and that the corrective measures required by the regulators are "illegal." The European Commission fined Apple under the Digital Markets Act, stating that it did not allow developers to direct users to make purchases outside of the App Store. In a statement, Apple stated that the EU's decision exceeded legal requirements and introduced confusing business terms. Apple has also adjusted its App Store policies to allow developers to promote payment processes outside of the app to circumvent some fees
According to Zhitong Finance APP, Apple Inc. (AAPL.US) has appealed against the €500 million (approximately $580 million) fine imposed by the European Union, claiming that the penalty is "unprecedented" and that the regulatory body's requirements for changes to its App Store are "illegal."
In April of this year, the European Commission announced the fine under the Digital Markets Act, stating that the iPhone manufacturer violated rules by not allowing developers to direct users to make purchases outside of the App Store. In June, Apple modified its EU App Store policies to meet local requirements and avoid additional penalties.
Apple stated in a press release on Monday: "We believe that the European Commission's decision—and this unprecedented fine—far exceeds what the law requires. As our appeal will demonstrate, the European Commission is mandating how we operate our app store and imposing confusing and detrimental commercial terms on developers."
In the June adjustment of App Store policies, Apple introduced a tiered commission structure, requiring developers to pay a commission of 5% or 13%, in addition to a 2% user acquisition fee, depending on whether developers want their apps to appear in App Store search suggestions, promotional materials, or whether they can obtain automatic update features.
Apple claims that it was the regulatory body that required the adoption of this new tiered model in the EU, which Apple believes confuses both users and developers, and that no other app download stores have such a structure.
Now, Apple also allows developers to more freely promote payment processes for digital goods outside of apps, thereby avoiding some fees. The company also stated that the European Commission has illegally broadened the definition of "guidance," meaning that in more cases, developers can direct users to complete transactions elsewhere.
These developments are the latest progress in Apple's global App Store disputes. Earlier this year, a judge in California ruled that Apple must allow U.S. developers to freely direct users to complete in-app purchase transactions via the web, exposing it to billions of dollars in revenue risk each year.
In recent years, the EU has imposed several high fines on companies, including over $8 billion on Alphabet's Google, and a separate ruling requiring Apple to pay €13 billion in back taxes to Ireland
