Por Foo Yun Chee
(Reuters) – Apple was the target of a complaint to the European Union’s competition bodies by two civil rights protection groups this Wednesday about the terms and conditions of its App Store for allegedly violating rules aimed at controlling Big Techs.
The joint complaint by Article 19 and the German Civil Rights Society to the European Commission could represent yet another headache for Apple, which was fined 500 million euros in April for violating the Digital Markets Act (DMA).
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Apple, which previously stated that its rules ensure that marketplaces meet specific minimum requirements to protect users and developers, dismissed the allegations as false and placed the blame on the Commission.
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“The European Commission is determining how we operate our store and imposing commercial terms that are confusing to developers and harmful to users,” Apple said in an email.
“Months ago, we notified the Commission of our plans to implement additional changes to letter of credit requirements to provide more flexibility to developers, but the Commission asked us not to do so.”
The European Union Executive, which acts as the bloc’s competition watchdog, said it was aware of the submission.
“Third-party contributions are very important to the effective application of the DMA,” said a Commission spokesperson.
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“We are already looking into (some of) these issues, as we are currently seeking feedback from market participants regarding Apple’s commercial terms and regularly overseeing gatekeepers’ compliance with the rules.”
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The DMA establishes a list of permitted and prohibited practices for large technology companies, with the aim of allowing smaller competitors to enter markets dominated by the largest companies and offering more options to users.
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The complaint targets Apple’s commercial terms and conditions for the App Store and its iOS and iPadOS operating systems, saying they prevent small businesses from interoperating with Apple devices.
The lawsuit also criticizes restrictions on the installation and use of third-party software applications and app stores that it says harm business and end users by violating the DMA.
Civil rights groups highlighted a €1 million stand-by letter of credit (SBLC) required of developers who want to develop apps for distribution on Apple’s App Store or who want to install a third-party app store as a native app on Apple’s iOS and iPadOS.
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“An SBLC of 1,000,000 euros may impose recurring annual cost and guarantee requirements that many SMEs are unable to meet,” says the 16-page lawsuit seen by Reuters.
The groups asked the Commission to fine Apple. Penalties can reach 10% of a company’s global annual revenue.
