Apple vs. the EU: Why Brussels Is Challenging the App Store Business Model
The Digital Markets Act is changing the relationship between Europe and Big Tech, and Apple is one of its biggest tests
BUSINESSNEWS
Few companies have become as closely associated with the smartphone economy as Apple. Its App Store sits at the centre of a vast digital ecosystem, connecting developers with users while giving Apple considerable influence over how apps are distributed and how transactions take place.
In the European Union, however, the question is no longer simply how successful that business model is. It is whether the rules governing it comply with the EU’s evolving approach to digital markets.
On 23 April 2025, the European Commission found Apple in breach of the Digital Markets Act (DMA) and imposed a €500 million fine. The decision concerned the Act’s so-called anti-steering obligation, which is designed to allow app developers to inform customers about alternative offers and direct them towards them. The case marked an important test of the EU’s ability to enforce its new digital rulebook against one of the world’s largest technology companies.
What is the Digital Markets Act?
The DMA represents a significant change in the way the EU regulates large digital platforms. Adopted in 2022, Regulation (EU) 2022/1925 establishes specific obligations for major platforms designated as gatekeepers — companies that occupy an important position between businesses and consumers in digital markets.
Traditional EU competition law generally assesses whether particular conduct restricts competition, often through an investigation into a company’s behaviour and its effects on a market. The DMA takes a complementary approach. Rather than relying exclusively on case-by-case enforcement after a competition problem has arisen, it establishes obligations that designated gatekeepers must follow in advance.
The objective is to make digital markets fairer and more contestable, giving businesses and consumers greater choice and reducing the risk that powerful platforms can use their position to restrict access to customers.
Apple is designated as a gatekeeper in relation to several core platform services, including its App Store. Its obligations therefore arise not simply because it is a successful company, but because the relevant services fall within the specific framework established by the DMA.
What did the Commission object to?
The Commission’s decision concerned Article 5(4) of the DMA, which addresses the relationship between gatekeepers and the businesses that depend on their platforms.
Under this provision, developers distributing apps through a gatekeeper’s app store must be able to communicate and promote offers to users, including offers available outside the platform, and allow users to conclude transactions following that communication. The obligation is intended to prevent a platform from restricting a developer’s ability to reach customers with alternative offers.
The Commission concluded that Apple’s contractual and technical restrictions prevented developers from fully benefiting from alternative distribution channels. It also objected to fees associated with transactions resulting from this process that went beyond permissible remuneration for facilitating the initial acquisition of users. The Commission therefore ordered Apple to bring the non-compliance to an end and imposed the €500 million fine.
The issue was not simply the price of an app or Apple’s market share. It concerned how much control Apple could exercise over the relationship between developers and their customers, particularly when developers wanted to offer products or subscriptions on different terms outside the App Store.
The Commission adopted its decision after a dialogue with Apple in which the company had the opportunity to present its arguments. Apple subsequently brought an action before the EU General Court seeking to annul the decision, or at least parts of it, and to challenge the fine. The decision must therefore be understood as an enforcement measure that Apple has contested through the EU judicial system.
Why does this matter?
The case illustrates a central difficulty in regulating digital markets. Platforms often act as intermediaries between businesses and consumers, but they may also establish the commercial and technical conditions under which those businesses operate.
When a company controls access to an important platform, the rules governing distribution, payments and communication can influence whether competing offers can effectively reach consumers. A developer may technically be free to offer an alternative product, for example, but that freedom becomes less meaningful if the platform imposes restrictions that make it difficult to inform customers about the alternative or complete a transaction.
This is the kind of problem the DMA seeks to address. Its purpose is not to eliminate every contractual restriction or prevent platforms from charging for legitimate services. Rather, it establishes specific requirements for gatekeepers and limits the extent to which their rules can undermine the obligations imposed by the legislation.
That distinction is important. The DMA does not prohibit Apple from operating the App Store or from establishing commercial rules. It requires those rules to comply with the legal obligations applicable to its designated services.
Competition law is becoming digital regulation
The Apple case also reflects a broader development in European economic regulation. For decades, EU competition law has provided the institutions with powerful tools to investigate anticompetitive conduct, including abuses of a dominant position under Article 102 of the Treaty on the Functioning of the European Union.
The DMA adds a distinct layer to this framework. It recognises that certain digital markets have characteristics — including strong network effects and the importance of access to established platforms — that may justify specific obligations for gatekeepers without requiring every case to begin with a conventional abuse-of-dominance investigation.
The two approaches are complementary rather than interchangeable. The DMA does not replace EU competition law, and conduct falling outside its specific obligations may still raise questions under the traditional competition rules.
Nor is Apple the only company affected. Google, Meta, Amazon and Microsoft are among the major technology companies subject to gatekeeper obligations, although the precise requirements depend on the services each company has had designated. The result is an increasingly detailed European regulatory framework for the digital economy.
The bigger question
The Apple case is about more than the App Store. It raises a broader question about the future of digital markets: who should determine the rules of the platforms on which modern businesses depend?
For Apple, those rules have traditionally been shaped to a large extent by the company itself. The European Union’s position is that, when a platform qualifies as a gatekeeper, its freedom to set those rules is subject to specific public obligations designed to preserve fair and contestable markets.
Whether that approach will achieve its objectives depends on more than the size of the fines imposed. It also depends on how effectively the obligations are enforced, whether businesses can genuinely benefit from the alternatives the law is intended to protect, and how the courts interpret the boundaries of the new framework.
The €500 million fine was a significant enforcement step, but the deeper importance of the case lies in the legal principle behind it. Through the DMA, the EU is testing whether a framework designed specifically for the digital economy can influence the behaviour of the world’s largest technology companies.
Apple is one of the clearest tests of that approach — and the outcome will help shape the relationship between digital platforms, businesses and European regulators in the years ahead.
→ All News