Apple Faces EU Warning Over iPhone Operating System Compatibility

Apple is set to face a warning from the European Union that it could face hefty fines under digital monopoly rules if it doesn’t open up its secure iPhone operating system to rival technologies.

The EU watchdog said on Monday that Apple must comply with strict new rules under the bloc’s Digital Markets Act (DMA) to make its operating system fully compatible with other technologies.

The EU has said it could launch a formal investigation if Apple fails to comply with the DMA, which could ultimately result in huge fines of up to 10% of its global annual turnover.

The announcement comes a step ahead of a formal investigation, but it comes as the EU aims to force Apple to redesign its services to allow competitors to access its iPhone and iPad operating systems.

“Today marks the first day that we are using the specification procedure under the DMA to guide Apple in effectively complying with its interoperability obligations,” EU competition commissioner Margrethe Vestager said in a statement. “Effective interoperability with smartphones and operating systems is a key part of this.”

The DMA is a law that designates platform operators of a certain size as ‘gatekeepers’ and specially regulates them in order to prevent abuse of market dominance by large platform operators. It is also called the ‘Big Tech Bullying Prevention Act’, and seven companies, including Apple, are designated as gatekeepers.

Apple is already facing a parallel investigation into its App Store rules for developers, which could result in severe penalties.

Apple said it has created a way for developers to request additional interoperability with the iPhone and iPad operating systems while protecting users’ security.

He added that weakening the safeguards built into the system over time could pose a risk to European consumers.

Apple announced the latest version of its flagship device, the iPhone 16, earlier this month, confident that it can still entice consumers with modest hardware upgrades and AI technology.

Meanwhile, Apple said in June that certain features such as Apple Intelligence, iPhone Mirroring and SharePlay screen sharing would be excluded in the EU due to the DMA’s requirements for the operating system to integrate with third-party apps.

Apple shares rose 1.6% to $224.25 in premarket trading on volume of 164,801 shares.