Apple Thursday made changes to its App Store European policies, saying it believes the new rules will help the company avoid a fine of 500 million euro ($585 million) from the EU for violating the Digital Markets Act.<\/p>\n
The new policies are a complicated system of fees and programs for app makers, with some developers now paying three separate fees for one download. Apple also is going to introduce a new set of rules for all app developers in Europe, which includes a fee called the \u201ccore technology commission\u201d of 5% on all digital purchases made outside the App Store.<\/p>\n
The changes Apple announced are not a complete departure from the company\u2019s previous policy that drew the European Commission\u2019s attention in the first place.<\/p>\n
Apple said it did not want to make the changes but was forced to by the European Commission\u2019s regulations, which threatened fines of up to 50 million euros per day. Apple said it believed its plan is in compliance with the DMA and that it will avoid fines.<\/p>\n
\u201cThe European Commission is requiring Apple to make a series of additional changes to the App Store,\u201d an Apple spokesperson said in a statement. \u201cWe disagree with this outcome and plan to appeal.\u201d<\/p>\n
A spokesperson for the European Commission did not say that Apple was no longer subject to the fine. He said in a statement that the EC is looking at Apple\u2019s new terms to see if the company is in compliance.<\/p>\n
\u201cAs part of this assessment the Commission considers it particularly important to obtain the views of market operators and interested third parties before deciding on next steps,\u201d the spokesperson said in a statement.<\/p>\n
The saga in Brussels is the latest example of Apple fiercely defending its App Store policies, a key source of profit for the iPhone maker through fees of between 15% and 30% on downloads through its App Store.<\/p>\n
It also shows that Apple is continuing to claim it is owed a commission when iPhone apps link to websites for digital purchases overseas despite a recent court ruling that barred the practice in the U.S.<\/p>\n
Under the Digital Markets Act, Apple was required to allow app developers more choices for how they distribute and promote their apps. In particular, developers are no longer prohibited from telling their users about cheaper alternatives to Apple\u2019s App Store, a practice called \u201csteering\u201d by regulators.<\/p>\n
In early 2024, Apple announced its changes, including a 50 cent fee on off-platform app downloads.<\/p>\n
Critics, including Sweden\u2019s Spotify, pushed back on Apple\u2019s proposed changes, saying that the tech firm chose an approach that violated the spirit of the rules, and that its fees and commissions challenge the viability of the alternative billing system. The European Commission investigated for a year, and it said on Thursday that it would again seek feedback from Apple\u2019s critics.<\/p>\n
\u201cFrom the beginning, Apple has been clear that they didn\u2019t like the idea of abiding by the DMA,\u201d Spotify said last year.<\/p>\n
Epic Games CEO Tim Sweeney, whose company successfully changed Apple\u2019s steering rules in the U.S. earlier this year, accused Apple of \u201cmalicious compliance\u201d in its approach to the DMA.<\/p>\n
\u201cApple\u2019s new Digital Markets Act malicious compliance scheme is blatantly unlawful in both Europe and the United States and makes a mockery of fair competition in digital markets,\u201d Sweeney posted on social media on Thursday. \u201cApps with competing payments are not only taxed but commercially crippled in the App Store.\u201d<\/p>\n
The European Commission announced the 500 million euro fine in April. The commission at the time said that the tech company might still be able to make changes to avoid the fine.<\/p>\n
Apple\u2019s restrictions on steering in the United States were tossed earlier this year, following a court order in the long-running Epic Games case. A judge in California found that Apple had purposely misled the court about its steering concessions in the United States and instructed it to immediately stop asking charging a fee or commission on for external downloads.<\/p>\n
The order is currently in effect in the United States as it is being appealed and has already shifted the economics of app development. As a result, companies like Amazon and Spotify in the U.S. can direct customers to their own websites and avoid Apple\u2019s 15% to 30% commission.<\/p>\n
In the U.S., Amazon\u2019s iPhone Kindle app now shows an orange \u201cGet Book\u201d button that links to Amazon.com.<\/p>\n<\/p>\n
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