Apple facing new antitrust scrutiny by EU on two fronts

Apple is facing two new regulatory challenges, as the European Union said Tuesday it has launched antitrust probes into the tech giant’s App Store and Apple Pay digital payment service.

There are separate issues in each probe: Investigating whether Apple’s App Store guidelines for app developers violate EU competition rules, and also determining how the company allegedly limits access to Apple Pay within apps and websites. If the EU determines Apple is violating its regulations, it could require the company to change its operations, and fine Apple up to 10% of its annual sales.

Margrethe Vestager, the EU’s executive vice president in charge of competition policy, said that because of how mobile applications affect the abil

ity of people to access content, and Apple’s own rules around how apps are distributed, “it appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices. We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers.”

Apple allows any app developer who meets its publication guidelines to put their apps on the App Store for free. Apple then makes money by taking a 30% cut from what developers earn from in-app purchases and on first-year app subscriptions. That subscription fee drops to 15% a year in subsequent years.

“Apple has every right to charge a fee for developers

to use their platform for distribution. That is just good business,” said Tim Bajarin, president of tech consultancy Creative Strategies. “But developers also have a right to question the actual fee Apple gets for this right. This has nothing to do with anti-trust and more to do with developers wanting to have Apple distribute their apps for free or a smaller fee.”

The EU also said it was looking at Apple Pay after complaints about Apple forcing developers to use the no-contact system to accept payments from consumers, and making it the only “tap-and-go” payment option for Apple’s iOS devices, such as the iPhone.

Apple didn’t immediately return a request for comment about the EU’s measures.