Apple Appeals $580 Million EU App Store Fine, Terms it ‘Unprecedented and Unlawful’

Phone maker Apple has appealed against the $580 million fine imposed against it by the European Union, Yahoo Finance reported. While appealing the EU App Store Fine, Apple said the penalty was unprecedented and unlawful. The European Commission imposed the fine after finding Apple in breach of the Digital Markets Act.

Apple’s Appeal

According to the Commission, the iPhone maker breached the law when it opted to keep app developers from directing users to cheaper deals outside the App Store. Apple is fighting the EU antitrust fine at the general court, which is the second highest court in Europe.

“Today we filed our appeal because we believe the European Commission’s decision – and their unprecedented fine – go far beyond what the law requires. As our appeal will show, the EC is mandating how we run our store and forcing business terms which are confusing for developers and bad for users,” Apple said.

In June this year, Apple reviewed its App Store rules to adhere with the EU directives. The European Commission had ordered the iPhone to remove commercial and technical restrictions on developers to avoid penalties amounting to 5% of its average daily global revenue. As part of the review, Apple developed a new pricing plan for developers who use its App Store.

The tech giant introduced a tiered commission structure of 5% or 13% in addition to a 2% user acquisition fee. The fee is dependent on whether users want their app to appear on App Store promotional content, search suggestions, or be able to receive automatic updates.

However, Apple has accused the EU regulators of targeting it as no other app store has been subjected to a similar structure. Apple has also allowed developers to support out-of-app payment processions for their digital products.

EU-US Counter Accusations

On July 7, the US big tech company claimed that the European Commission is compelling it to deploy terms that confuse developers in order to avoid penalties. Apple also took a swipe at the Commission for its take on the DMA anti-steering rules breach.

According to the US big tech, officials in Brussels expanded the definition of steering unlawfully by, for example, focusing on whether app developers should link to external websites and whether developers should be allowed to market offers within the app. The UK holds that Apple hates any attempts by the EU to change its App store.

“The blunt truth is that it is worth spending a few million on legal fees in order to disrupt and delay the development of a more open app ecosystem, which is a market that is worth many billions a year to Apple,” Former Legal Director at the UK Competition and Markets Authority Tom Smith said.

EU Trade Deal

President Trump plans to seal a trade deal with the EU by July 9. He has however threatened to impose a 50% duty on EU imports if a deal is not reached. Peter Navarro, senior trade advisor to US President Donald Trump has accused the EU of targeting American tech companies. According to Navarro, the US has been using regulations against Meta and Apple as part of its non-tariff weapons.

In April, European Commission VP responsible for tech sovereignty Henna Virkkunen said the EU will not water down its tech rules in order to strike a trade deal with the US. Early this year, Meta CEO Mark Zuckerberg accused the EU of using its digital law to institutionalize censorship.

The latest appeal is part of Apple’s ongoing global battle over its App Store rules. Earlier this year, a California judge ordered the iPhone maker to allow US app developers to direct their users to the internet in order to complete in-app purchases. This change could cost the big tech billions in annual revenue. In recent years, the European Union has also cracked down on other US big techs, fining Google Alphabet over $8 billion and ordering Apple to pay Ireland €13 billion in taxes.