Apple in breach of law on App Store, says EU

European Union regulators have accused Apple of being in breach of new laws designed to rein in big tech companies.

The European Commission, which regulates competition in the EU, said Apple's App Store squeezes out rival marketplaces, marking the first time it has found a company in breach of the Digital Markets Act (DMA).

The firm faces a potential fine of up to 10% of its global revenue if it fails to comply with the rules.

Apple said it is "confident our plan complies with the law".

The tech giant has been given the opportunity to review the investigation's preliminary findings, and it can avoid a monster fine if it comes back with a proposal which is satisfactory to the EU.

The European Commission says that developers should be able to freely tell customers when there are cheaper app stores available beyond the one run by Apple.

The firm charges developers an average of 30% commission on its App Store.

Previously, it was told to allow alternatives in the EU in March.

"We have reason to believe that the App Store rules not allowing app developers to communicate freely with their own users is in breach of the DMA," said EU Commissioner Thierry Breton.

The Commission also alleges that Apple's fees "go beyond what is strictly necessary".

In response, Apple said it has made changes in the past few months to ensure it complies with the DMA.

"We estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created," it said in a statement.

"All developers doing business in the EU on the App Store have the opportunity to utilize the capabilities that we have introduced, including the ability to direct app users to the web to complete purchases at a very competitive rate."

Another of Apple's main arguments is that users benefit from strong security measures by sticking to the official App Store.

In response, the Commission says it will happily discuss security issues.

Separately, the European Commission has opened another investigation into Apple regarding new contractual terms for developers.

This focuses on three main areas:

• A fee of €0.50 (£0.42) which Apple charges developers for every app downloaded outside of Apple's App Store
• The number of steps which Apple puts in place for users who want to download apps from alternative stores
• Whether Apple's eligibility criteria for alternative app store developers breaches the DMA

Apple says it changed its eligibility criteria in March to make it easier for developers to set up app stores.

It also says it removed the €0.50 fee for apps which make no money - such as those designed by students - in May.