Apple Announces App Store Changes

Regulators have criticized Apple for imposing restrictions that prevented app developers from communicating, promoting offers, and concluding contracts through their preferred channels.

Starting this autumn, Apple will allow developers in the EU to promote offers and make purchases through alternative platforms, such as other app marketplaces. However, Apple announced on Thursday that developers will face a new fee structure for customers who link out of an app.

Specifically, developers will be required to pay a 5% fee on sales of digital goods and services made on any platform within a year of the user first installing an app that includes the ability to link to a different channel, such as a website.

The Digital Markets Act (DMA) allows tech giants to avoid hefty fines if they modify their platforms to comply with EU rules. The European Commission has stated that it will assess Apple’s compliance with these measures, considering feedback from developers and the market.

The charges against Apple follow investigations launched in March by the European Commission into Apple, Meta, and Google under the DMA. Meta also faced formal accusations of violating the DMA in July. The DMA provides a list of dos and don’ts for big tech companies to increase competition in the digital marketplace, such as offering more options for web browsers and search engines.

The law enables the EU to impose fines of up to 10% of a company’s global turnover, which can increase to 20% for repeat offenses. Additionally, Apple could face daily penalties of up to 5% of its average daily worldwide turnover if found non-compliant. Apple’s total revenue for the year ending September 2023 was $383 billion.

The Coalition for App Fairness, which includes members like Spotify, criticized Apple’s new fee structure, arguing that it complicates the digital landscape in Europe and increases costs for developers and consumers.

The DMA also targets other major companies, including Google, Amazon, Meta, Microsoft, and TikTok’s owner ByteDance. Online travel giant Booking.com will be required to comply later this year, and the commission is also considering whether Elon Musk’s platform, X, should be subject to the rules. Apple’s App Store has long been a point of contention with the EU, which previously fined Apple 1.8 billion euros ($2 billion) after a 2020 probe prompted by a complaint from Spotify. Apple has appealed the fine and is under ongoing investigation by the EU regarding its compliance with the DMA.