Apple may have to pay over $500 million penalty due to ‘restrictive’ App Store policies

Apple has been fined €500 million (around $570 million) by the European Commission for violating the Digital Markets Act (DMA), marking the first major penalty under the new regulation. The fine centres on iPhone maker's App Store policies, which the Commission says prevented app developers from freely steering users toward alternative purchasing options outside the App Store.

Apple’s Policy Under Scrutiny

The DMA requires that developers be allowed to inform users about and direct them to external purchasing methods—without any charge or restriction. However, the Commission has found that Apple’s current policies, including fees imposed on external payments, effectively discourage such alternatives. Apple charges developers over 17% commission on transactions made outside its platform, a practice seen as incompatible with the DMA.

The Commission stated the fine amount reflects the "gravity and duration" of Apple’s non-compliance. Although specific breaches were not itemised in the announcement, the Commission concluded that developers "cannot fully benefit from the advantages of alternative distribution channels outside the App Store.”

Required Changes and Possible Future Fines

In addition to the fine, Apple has been ordered to eliminate technical and commercial restrictions that limit app developers’ ability to steer users towards other payment options. This could lead to significant changes to the company’s App Store rules across the European Union.

Furthermore, the Commission has issued a preliminary assessment that Apple’s support for third-party app marketplaces is also inadequate. It cited the Core Technology Fee—charged to developers even when distributing apps outside the App Store—and overly complicated user processes as barriers that undermine genuine competition.

Apple has the opportunity to respond to this preliminary decision before any additional penalties are confirmed.

Partial Compliance Recognised

In a small win for Apple, the Commission did find that recent updates to iOS concerning user choice over default apps met regulatory expectations. These include changes such as allowing users to select default web browsers and messaging apps, as well as enabling the full removal of built-in apps like Safari.