Big Tech App Stores Focus of EU Digital Crackdown, Vestager Says

The European Union’s sweeping new law to rein in potential market abuse from the world’s biggest tech firms will first focus on sorting out app stores, the bloc’s competition chief Margrethe Vestager said.

EU's Digital Markets Act focuses on app stores to prevent market abuse by tech giants. (AP)

The European Union's sweeping new law to rein in potential market abuse from the world's biggest tech firms will first focus on sorting out app stores, the bloc's competition chief Margrethe Vestager said. 

Just days before the Digital Markets Act comes into force Vestager said in an interview with Bloomberg TV that she's most concerned about smaller app stores being given fair access to operating systems run by companies that dominate the market like the likes of Apple Inc., Alphabet Inc.'s Google, and Microsoft Corp.

“I think it's important for instance that you can have more than one app store on your phone,” Vestager said. “In any other circumstance, if you don't like one shop, you can go into another one.” 

Under the DMA, firms face a slew of new restrictions across operating systems, app stores and their digital platforms. Fines for violating these rules will be as high as 10% of a company's total annual worldwide revenue, or as much as 20% for repeat offenders.

Over recent weeks, large technology companies swept up by the rules - also including Amazon.com Inc. and Meta Platforms Inc. -  have made several proposals to comply with the DMA and avoid further scrutiny. When it comes to the App Store, Apple has made efforts to restructure the fees it charges developers since it scrapped the 30% commission it has historically imposed, on top of new fees the EU could examine the legality of.

Big Tech firms shouldn't make their DMA compliance plans “unattractive” for clients and users, Vestager said. “The DMA is quite specific, also when it comes to having a fee structure that actually enables people to use these new benefits.”  

On Monday, Apple, was hit with a €1.8 billion ($2 billion) fine for barring music streaming rivals such as Spotify from informing users of cheaper deals. It marked the company's first fine under EU antitrust law. The company has vowed to appeal the decision.

The renewed EU focus on the alleged abuses of large technology companies shouldn't be taken as anti-US bias, Vestager said Tuesday.  “It is really important to maintain that this is about a market that is open, dynamic, and is there for you to do business no matter where you're headquartered.”

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