CUPERTINO, Calif. – In a strategic move to comply with the European Union’s Digital Markets Act (DMA), Apple has announced substantial changes to its App Store policies in the EU, aiming to mitigate further penalties.
Immediate Impact
On Thursday, Apple revealed a new tiered system for its Store Services fee applicable to purchases made outside apps. This change is designed to align with the DMA’s requirements and avoid additional penalties following a significant €500 million fine imposed by the EU earlier this year.
Key Details Emerge
The new system introduces two tiers for developers. Tier 1 offers basic App Store features at a reduced 5 percent commission on in-app purchases. This includes essential services such as app reviews, privacy nutrition labels, and access to Apple Support. However, it lacks features like automatic app updates and downloads, which are crucial for app promotion.
Developers seeking full access to App Store features must opt for Tier 2, which carries a 13 percent commission. Apps will default to Tier 2, but developers can choose to switch to Tier 1 if desired.
Industry Response
Epic Games CEO Tim Sweeney, known for his legal battle with Apple over App Store commissions in the US, criticized the limitations imposed on developers in Tier 1. He highlighted the potential disadvantages for developers opting for the cheaper tier.
By the Numbers
€500 million penalty imposed by the EU on April 23rd
5% commission for Tier 1, 13% for Tier 2
€0.50 per download Core Technology Fee for apps exceeding 1 million installs annually
What Comes Next
Apple plans to introduce a new Core Technology Commission, charging a 5 percent fee on external purchases made in apps distributed via the App Store. This will replace the existing Core Technology Fee by January 1, 2026, transitioning to a single business model for EU developers.
Background Context
The changes follow the EU’s ruling against Apple’s “anti-steering” practices, which restricted developers from directing users to external purchase options. The EU’s preliminary findings also questioned the necessity and proportionality of Apple’s Core Technology Fee and other restrictions.
Apple has stated its intention to appeal the penalty, asserting, “The European Commission is requiring Apple to make a series of additional changes to the App Store. We disagree with this outcome and plan to appeal.”
Expert Analysis
Industry experts suggest that these adjustments could set a precedent for other tech companies operating in the EU. The timing of these changes is particularly significant as they align with increasing regulatory scrutiny on major tech firms worldwide.
Regional Implications
The EU Commission will now evaluate Apple’s proposed changes before deciding on any further non-compliance fines. The outcome of this assessment could influence future regulatory policies across the tech industry.
The move represents a significant shift from Apple’s traditional business model, reflecting the growing influence of global regulatory frameworks on tech giants.
