EU court rejects Apple's DMA challenge, upholds 5 App Store rules

The General Court on Wednesday dismissed Apple's challenge against European Commission rules labeling its five App Stores and iOS operating system as gatekeepers, subjecting them to strict interoperability and competition obligations under the Digital Markets Act.

"The General Court dismisses Apple's actions regarding its designation as a gatekeeper in relation to the App Store and iOS," the Luxembourg-based tribunal said in its ruling.

The court also ruled Apple's challenge regarding the iMessage service inadmissible. The iPhone maker had contested the European Commission's 2023 decision designating its five App Stores — on iPhone, iPad, Mac, Apple TV and Apple Watch — as a single core platform service, and its iOS operating system as an important gateway for businesses to reach consumers. The cases were filed under docket numbers T-1079/23, T-1080/23 and T-214/24.

The ruling forces Apple to comply with DMA obligations including allowing rival app stores, enabling sideloading, and supporting alternative payment systems in the EU — changes that threaten the high-margin services revenue stream that generated more than $96 billion for the company in its last fiscal year. Apple had argued the designations would force it to compromise user privacy and security, a position the court rejected.

What the DMA Requires

The Digital Markets Act, which took effect in May 2023, designates companies with more than 75 billion euros in market capitalization and at least 45 million monthly active users in the EU as gatekeepers. Apple's App Store generates an estimated $85 billion in annual gross billings from the region, according to company disclosures. The DMA requires gatekeepers to allow third-party app stores, give developers access to payment systems beyond Apple's own, and enable users to download apps from outside the official marketplace — changes Apple has resisted since the rules were proposed.

The last time a major tech company challenged DMA designations, Meta Platforms lost its bid to exempt Messenger and Marketplace from similar obligations in 2024, with the General Court ruling that the social media company's core platform services met the threshold for regulation. That precedent, combined with Wednesday's ruling, narrows the legal avenues available to Big Tech firms seeking to avoid the EU's competition framework.

Broader Regulatory Ripple Effects

The decision arrives as regulators globally tighten oversight of app store economics. In the U.S., Texas is enforcing an age verification law requiring app stores to confirm user ages and obtain parental consent for minors, a mandate the Supreme Court declined to pause this week. Apple had opposed the Texas law, with Chief Executive Officer Tim Cook personally lobbying Governor Greg Abbott against it.

Apple can appeal Wednesday's ruling to the European Court of Justice, the EU's highest court, though legal experts said the narrow grounds for appeal make a reversal unlikely. The company must now submit a compliance plan to the European Commission detailing how it will open its iOS ecosystem to rivals, with potential fines of as much as 10 percent of global annual revenue — roughly $40 billion based on Apple's last fiscal year — for noncompliance.

This article is for informational purposes only and does not constitute investment advice.