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Apple's Approach to New EU Digital Markets Act
On Thursday, Apple unveiled its new strategy which will allow software developers to distribute their apps to European Union customers directly, breaking away from the restrictive confines of Apple's App Store. This shift comes in response to the recent EU legislation, the Digital Markets Act (DMA).
The DMA mandates that firms boasting a customer base of 45 million active monthly users and a market value of 75 billion euro ($82 billion) must ensure app interoperability with competitor offerings and provide users with options for pre-installing apps on their gadgets.
Revamped App Store Rules Effective March
Starting March, developers are granted the freedom to promote alternative app stores on iPhones and evade Apple's in-app payment mechanism, notorious for its hefty commission rates around 30%. However, app submission for security and fraud checks with Apple remains mandatory. In addition, a "core technology fee" will apply to major developers, regardless of whether they engage Apple's payment services or not.
Epic Games CEO Criticizes Apple's Proposed Plan
The Chief Executive Officer of Epic Games, Tim Sweeney, has voiced his objection to Apple's new proposal, labelling it as "hot garbage". Furthermore, he has questioned the compliance of these alterations with the DMA. His central argument revolves around the potential of Apple obstructing competing app stores or emergent market players.
New Developer Tools and Consumer Changes Unveiled
Apple has introduced tools tailored to the new commercial arrangements for developers. Users will start noticing these changes with the iOS system update slated to roll out in March.
Companies such as Epic and Spotify Technology have long argued that Apple's commission structure and limitations have negatively impacted their business operations. However, recent developments in the legal and regulatory domain have prompted changes in Apple's App Store model.
Effect of Changes on Future App Stores and Payment Systems
In compliance with a court verdict in an antitrust case lodged by Epic, Apple has agreed to modify the rules around in-app third-party payments. However, they envisage imposing a 27% commission fee, which is unlikely to bring substantial financial relief to developers.
On the other hand, developers in the EU are free to employ a third-party payment processor within the App Store app at zero cost. Additionally, Apple will offer EU iPhone users the choice of a default web browser and contactless payments app, thereby eliminating the need for Apple Pay to complete contactless transactions.
Notably, developers who opt out of Apple's App Store or payment system will still be burdened with a “core technology fee” of 50 euro cents per user account yearly.
