High profile developers not happy with Apple's response to DMA violations
Back in June, EU regulators made a preliminary ruling stating that Apple had violated the Digital Markets Act (DMA) by not allowing app developers to steer users to alternative channels for content and offers. Apple subsequently made some changes making it easier for developers to lead users to platforms outside of iOS where they can make purchases. But with Apple, no "tit" is ever offered without a "tat" and that applies here as well.
This coming fall, developers in the EU will be able to add links that will allow iPhone users to make purchases outside of developers' apps. The new rules say that developers can post and promote offers for purchases available at a destination chosen by each developer. These destinations include alternative app marketplaces, other apps, or websites. The offers can be accessed outside the app or in the app using a web view.
So far, so good. But here's where Apple does its thing. The company added a new "store services fee" that developers will pay for the sale of digital goods and services that take place within the first year after the user installs the app. These purchases will deliver some cash to Apple no matter what platform they were purchased on and the user doesn't even have to tap on the external link.
In the European Union where the new DMA law opens up app store competition, Apple continues its malicious compliance by imposing an illegal new 15% junk fee on users migrating to competing stores and monitor commerce on these competing stores.https://t.co/YUYwsnrh32pic.twitter.com/xAWGkOWPrH
— Tim Sweeney (@TimSweeneyEpic) August 8, 2024
That means Apple could receive a cut even if the purchase is made using an alternative app store or from a developer's website on any kind of device. Even if such a purchase is made on a Windows PC, Apple would be entitled to a piece of the transaction. And the one-year clock restarts if the user reinstalls the app or even updates it.
Apple's slice of this pie is 20% for apps available only from the App Store. Apps listed on third-party app storefronts pay 10% plus additional fees. Another 5% fee is tacked on purchases of digital goods and services on any platform within one year of when a user first installs the app. This initial acquisition fee allows Apple to take a 25% commission on purchases made within one year of downloading the app. While autorenewals and off-platform purchases are included, subscriptions and autorenewals bought prior to the downloading of the app are off-limits to Apple.
"We are currently assessing Apple’s deliberately confusing proposal. Apple once again blatantly disregards the fundamental requirements of the Digital Markets Act (DMA). The European Commission has made it clear that imposing recurring fees on basic elements like pricing and linking is unacceptable. We call on the Commission to expedite its investigation, implement daily fines and enforce the DMA."-,Jeanne Moran, ” Spotify spokesperson
The tech giant says that the value that the App Store provides developers by connecting them with EU consumers explains the initial acquisition fee while the store services fee "reflects the ongoing services and capabilities that Apple provides developers." But many high-profile developers disagree such as Tim Sweeney, CEO of Epic Games. Music streamer Spotify, another long-time critic of Apple's App Store fees, also had negative things to say about Apple's DMA revisions.
How will EU regulators respond? Stay tuned.
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Things that are NOT allowed: