Apple hit with EU antitrust complaint over App Store policies

By Foo Yun Chee

BRUSSELS (Reuters) -Apple was hit with a complaint to EU antitrust regulators by two civil rights groups on Wednesday over the terms and conditions of its App Store and devices for allegedly breaching landmark rules aimed at reining in Big Tech.

The joint complaint by Article 19 and Germany's Society for Civil Rights to the European Commission could pose yet another headache for Apple, which was fined 500 million euros ($583 million) in April for violating the Digital Markets Act.

Apple, which has previously said its rules ensure marketplaces meet specific minimum requirements to protect users and developers, dismissed the claims as false and put the blame on the Commission.

"The EC is mandating how we run our store and forcing business terms that are confusing for developers and bad for users," Apple said in an email.

"Months ago, we notified the EC of our plans to roll out additional changes to the letter of credit requirements to provide more flexibility for developers but the Commission asked us not to."

The EU executive, which acts as the bloc's competition enforcer, said it was aware of the submission.

"Third party contributions are very important for the effective enforcement of the DMA," a Commission spokesperson said.

"We are already looking into (some of) those issues, as we are currently seeking feedback from market participants in relation to Apple business terms and we are regularly supervising gatekeepers' compliance."

The DMA sets out a list of dos and don'ts for Big Tech firms aimed at allowing smaller rivals entry into markets dominated by the largest companies and giving users more choice.

The complaint targets Apple's business terms and conditions for its App Store, iOS and iPadOS operating systems, saying that these prevent and impede interoperability for small businesses with Apple devices.

It also takes aim at restrictions on the installation and use of third-party software apps and app stores which it said harm business users and end users in breach of the DMA.

The civil rights groups singled out a stand-by letter of credit (SBLC) of 1 million euros required from developers who want to develop apps for distribution in Apple's App Store or who want to install a third-party app store as a native app in Apple's iOS and iPadOS.

"A 1,000,000 euro SBLC can impose a recurring annual cost and collateral requirements that many SMEs cannot meet," said the 16-page complaint seen by Reuters.

The groups urged the Commission to fine Apple. DMA penalties can be as much as 10% of a company's global annual revenue.

($1 = 0.8575 euros)

(Reporting by Foo Yun Chee; Editing by Joe Bavier, Kirsten Donovan and Nick Zieminski)