Apple gets EU warning to open up iPhone operating system

Apple Inc. has been warned by the European Union to open up its highly guarded iPhone and iPad operating systems to rival technologies, or eventually risk significant fines under its flagship digital antitrust rules.

EU watchdogs announced under the bloc’s Digital Markets Act that Apple must step into line with strict new laws on making operating systems fully functional with other technologies. The Brussels-based authority gave the company six months to comply, or face the threat of future penalties.

While the announcement is a step shy of being a formal investigation, the EU aims to compel Apple to re-engineer its services to allow rival companies to access the iPhone’s and iPad operating systems.

“Today is the first time we use specification proceedings under the DMA to guide Apple towards effective compliance with its interoperability obligations,” EU competition chief Margrethe Vestager said in a statement. “Effective interoperability, for example with smartphones and their operating systems, plays an important role in this.”

Cupertino, California-based Apple said it’s created ways for developers to request additional interoperability with iPhone and iPad operating systems, while protecting users’ security. Undermining protections built into its systems over time would put European consumers at risk, the company added.

Apple shares rose 1.6% to $224.25 after the EU announcement confirms an earlier report by Bloomberg. One of the aims of the DMA is to ensure that other developers can gain access to key Apple features, such as its Siri voice commands and its payments chip.

The EU may later decide to launch a formal probe if Apple doesn’t step into line with the DMA, which could eventually lead to hefty fines of up to 10% of global annual sales. It is already facing a parallel investigation into its App Store rules for developers, which could also lead to hefty penalties.

Earlier this month, Apple announced the latest version of its flagship device, the iPhone 16, betting it can entice consumers with modest hardware upgrades and AI technology that’s still on the horizon.

But in June, the US giant said that certain features “- including Apple Intelligence, iPhone Mirroring and SharePlay Screen Sharing “- would be held back from the EU, due to the DMA’s requirements on operating systems to work with third-party apps.