On October 21, Apple launched its largest legal challenge to date at the EU General Court in Luxembourg, protesting the EU Digital Markets Act (DMA)’s broad regulatory changes to Apple’s core businesses, including iPhone, App Store and iMessage. According to Bloomberg, Apple is the first U.S. company to comprehensively challenge the legal system after TikTok lost the lawsuit.
Apple said that the DMA, which will take effect in 2023, requires the interoperability of core services of big technology companies with competitors and relaxes business model restrictions. The purpose is to prevent companies from using their dominant position in one field to consolidate other market advantages. However, the company believes that these regulations conflict with the EU's protection of security, privacy and property rights, and impose an "extremely onerous and intrusive" burden on so-called "gatekeeper" companies. In addition to Apple, companies currently designated as gatekeepers include Alphabet, Meta, Amazon, Microsoft, ByteDance and Booking.
In the complaint, Apple disputes three DMA-related designations or rulings:
First, Apple questions the obligation to require iPhone hardware to interoperate with third-party devices (such as headphones or smart watches), saying that forcing interconnection with unknown or unverified devices may undermine user security, infringe on intellectual property rights, and weaken the privacy control of the iOS system.
Second, the company objects to the DMA listing the App Store as a managed service. The EU previously determined that Apple had structural gatekeeping power over app distribution and fined Apple 500 million euros for violating "anti-bootstrap" regulations. Apple has contested both the determination and the fine in individual cases, stating that the App Store should not be considered a single unified service and therefore should not be included in the jurisdiction of the DMA.
Third, Apple questions the legality of the European Commission's investigation process into whether iMessage should be classified as a managed service. The Commission ultimately did not include iMessage in the DMA's comprehensive obligations because the service did not directly generate revenue for Apple. However, Apple believes that the relevant investigation itself has procedural flaws.
European Commission lawyer Paul-John Loewenthal argued that Apple has established an exclusive position through its absolute control of the iPhone platform, which can capture "excess profits" in complementary markets and put competitors at a disadvantage. He pointed out, "Only Apple holds the key to this 'walled garden' and decides which companies can access and provide products and services to iPhone users. Because of this control, Apple has locked in more than one-third of European smartphone users."
This lawsuit is the first time that Apple has asked an EU judge to limit the scope of the law before the DMA is fully implemented. The final ruling will determine whether the EU can force Apple to open up the iPhone technology layer, reshape the App Store rules, or require iMessage to be regulated.