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The EU has been a huge thorn in Apple’s side for some time. The company had to adopt USB type-C for its phones and it has to enable side-loading apps. Well, Apple proposed some App Store changes, but Meta and Microsoft are not happy with them (and neither is anyone else for that matter). The two giant companies are calling for the EU to reject Apple’s policy changes.
It’s no little no fact that the Apple App Store is pretty giant. It’s home to a monumental number of apps, and it generates tens of billions of dollars a year for Apple each year. However, the company has come under fire with different entities referring to it as a monopoly. Google has come under fire for a similar reason with the Google Play Store.
Meta and Microsoft want the EU to reject Apple’s changes to the App Store
Last month, Apple proposed changes to iOS 17 and the App Store that would satisfy the EU’s Digital Markets Act (DMA). If the company fails to comply with the changes, it risks a hefty €500 million fine. While that is pocket change compared to the company’s massive wealth, it’s still a fee that it wants to avoid.
Last month, Apple announced that it would open up the iOS software to facilitate side-loading apps from different sources. This is one thing that Epic Games has been fighting for a while. The company has argued against Apple’s “walled garden” approach to apps and charging such massive fees just to use its payment systems. So, Epic Games wants the ability to make its own app store and forgo Apple’s fees.
However, Apple proposed some changes to iOS and the App Store that two major tech companies are not really happy with. Meta and Microsoft have asked the EU to throw out Apple’s proposed changes, as they stand to hurt developers who’d sell their apps on other stores. This will especially go for people whose apps are free or not monetized.
Apple App Store changes
If you develop for the App Store, you have to pay Apple 30% of every service and good that you sell within your app. If you develop for an alternate app store on iOS, that price will drop from 30% to 17%. So, people will be able to keep 13% more of their more of the revenue. However, this seems to be where the benefits end.
Apple is going to impose a “core technology fee.” Every app that has more than 1 million downloads will be charged €0.50 for every subsequent first download or update. This means that for every million downloads after that point, the company will need to pay €500,000. Also, if an app uses an alternative App Store, but still uses Apple’s payment system, the developer will fork over an additional 3% for every purchase.
Negative effect on developers
So, as you can see, these fees are pretty outrageous. Many apps with more than a million downloads have a monetization system in place to offset those costs. However, not every million-download+ app generates a steady flow of income. Several apps with more than a million downloads aren’t as focused on heavy monetization. Thus, paying such a hefty amount of money for each download could devastate the developer’s income.
Also, we can’t forget about overnight sensations. Sometimes, an app gets very big in a short amount of time. It’s possible for an app to gain a massive amount of notoriety before the developer has a chance to create a monetization system. This could mean massive fees for the developer before they have a chance to start pulling in money.
Other companies responses
Companies like Meta and Microsoft have been very vocal about their distaste for Apple’s approach. Phil Spencer, the head of Xbox, told the Financial Times “The initial steps [to comply with the DMA] that Apple has put forward are very prohibitive to us actually creating a meaningful alternative to the one store that’s available on the world’s biggest gaming platforms, which are mobile phones,” he continued by saying, “so we will continue to work with regulators to open that up.”
There’s no doubt that these changes are very prohibitive. It appears that Apple crafted them to deter developers from leaving the App Store. In a way, it seems like Apple wants to punish developers for leaving the App Store.
Mark Zuckerberg, CEO of Meta, also spoke out, stating that he’d be surprised “if any developer chose to go into the alternative app store.” So, this seems to be Apple’s plan.
Another person dissatisfied with Apple’s changes is Damien Geradin, a lawyer representing developers standing against Apple. He said in a statement that after hearing the announcement, “it took about an hour for app developers to [realize] they had been screwed.” He added that “pretty much everyone will stick to the old terms in the DMA will effectively make no difference.”
Malicious
It’s apparent that much of the tech industry despises these changes that Apple is proposing. Along with Microsoft and Meta, Epic Games is not in agreeance with Apple either. In fact, the company has been crossing blaze with Apple for years over its App Store policies.
Tim Sweeney, the CEO of Epic Games, accused the company of “malicious compliance.” This basically means that Apple is, for all legal purposes, obeying the DMA’s rules and regulations. However, it’s doing so in a way that still hurts the users and pushes them to develop exclusively for the App Store. So, major tech brands and companies are all knocking Apple for its new changes.
The deadline for Apple to comply with the DMA’s policy is in March. So, if the EU finds that Apple’s plans do not properly satisfy the regulations, then it could face that €500 million fine. Only time will tell what the company is going to do. This article will be updated with additional information about the case with it comes out.