EU Charges Apple With Restricting Competition Under New Antitrust Law

European Union regulators on Monday filed preliminary charges against Apple for restricting competition in its App Store, the first case under a landmark antitrust law that came into full effect in March.

Apple's rules of engagement "prevent app developers from freely steering consumers to alternatives channels for offers and content," the European Commission (EC), the executive branch of the E.U. that handles antitrust regulation, wrote in a statement.

The commission's findings follow an investigation, announced in March, of Apple and other tech firms for non-compliance with the Digital Markets Act (DMA), which was designed to allow smaller tech companies to compete and lower prices for consumers.

"For too long Apple has been squeezing out innovative companies—denying consumers new opportunities and choices," Thierry Breton, a European commissioner responsible for digital markets, wrote on social media.

In a reference to Apple's slogan, "Think different," Breton quipped that it should be "Act different."

The DMA was designed to prevent Big Tech firms from using their market power to dominate the industry.

"In football terms, this is about getting your players onto the pitch. Imagine how easy it would be for one of the teams to win their game tonight if they made sure that the rival team couldn't even get into the stadium. This is in fact what we often see in the digital world: many companies get stuck in their changing room," Margrethe Vestager, an EC official in charge of competition policy, said in a speech delivered Monday about the law.

The DMA was also designed to give regulators a way to streamline antitrust efforts so they don't get bogged down in years of litigation, a process that could be tested in the current Apple case.

The EC sent its findings to Apple on Monday and the company now has a chance to respond to the charges, with the commission scheduled to reach a final decision by next March. Monday's action was akin to the "halfway stage" in a traditional antitrust lawsuit in which a company is issued a statement of objection and a chance to reform its practices, The Guardian reported.

If the findings are finalized, Apple would have one year to comply or face a penalty of up to 10% of global revenues. The company took in $383 billion last year. However, E.U. regulators aim for dialogue that leads to compliance, rather than issuing a penalty, according to The Guardian.

The DMA has kept the EC busy. In addition to the charges, the commission also announced on Monday a new investigation into Apple's iOS business terms, including the "core technology fee" it charges for every download of the app after 1 million downloads in a year.

"The developers' community and consumers are eager to offer alternatives to the App Store," Vestager, the commission official, said regarding the newest probe. "We will investigate to ensure Apple does not undermine these efforts."

Big Tech companies including Apple, which have been deemed "gatekeepers" by E.U. regulators, have challenged the DMA in court to try to limit the law's scope.

Apple's antitrust battles are not limited to Europe. "The charges underscore the risk to the company's business from increased regulatory scrutiny around the world," The New York Times reported.

The U.S. Department of Justice and sixteen states filed a landmark antitrust suit against the company in March alleging that the company "illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers." The United Kingdom and Japan have also recently investigated and taken legal action against the company.