CUPERTINO, CA – In a strategic move to comply with the European Union’s stringent Digital Markets Act (DMA), Apple has unveiled significant revisions to its App Store policies across the EU. The tech giant aims to circumvent further penalties following a substantial €500 million fine imposed in April.
Immediate Impact of App Store Changes
On Thursday, Apple announced a revamped tier system for its Store Services fee, which affects purchases made outside of apps. This initiative is designed to align with DMA requirements and to offer developers a choice between different levels of App Store features based on the commission they are willing to pay.
Key Details Emerge on New Tier System
The new structure introduces a two-tier system:
- Tier 1: Developers receive basic App Store features for a reduced 5 percent commission. This includes app reviews, privacy nutrition labels, and access to Apple Support but excludes automatic app updates and other promotional tools.
- Tier 2: For a 13 percent commission, developers gain full access to all App Store features. This tier is the default for apps, though developers can opt for Tier 1.
Apple’s new fee structure reflects a significant shift in its business model, aiming to comply with EU regulations while offering developers varied options.
Industry Response and Criticism
Epic Games CEO Tim Sweeney, known for his legal battle with Apple over App Store commissions, has criticized the limitations imposed on developers opting for the cheaper Tier 1. Sweeney argues that this could stifle innovation and competition.
Apple has also introduced a new fee, the Core Technology Commission, which applies a 5 percent charge on external purchases made within apps distributed through the App Store. This replaces the existing Core Technology Fee for developers who adhere to Apple’s alternative business terms.
By the Numbers: Financial Implications
The €500 million penalty, equivalent to approximately $570 million, underscores the financial stakes for Apple in complying with EU regulations.
What Comes Next for Apple
Apple plans a transition to a “single business model” for EU developers by January 1, 2026. This involves shifting the Core Technology Fee to the 5 percent Core Technology Commission for digital transactions across the App Store and alternative marketplaces.
The changes are a direct response to the EU’s ruling against Apple’s “anti-steering” practices, which restrict developers from directing users to make external purchases. Failure to comply with the ruling could result in additional fines and interest payments on the existing penalty.
Background Context and Legal Challenges
The EU’s penalty against Apple arose from its investigation into the company’s App Store practices, which were deemed to violate DMA rules. The European Commission has also initiated a separate probe into Apple’s Core Technology Fee and restrictions on alternative iOS app stores.
Apple, however, intends to appeal the penalty. In a statement to 9to5Mac, the company expressed its disagreement with the EU’s findings and outlined plans to contest the ruling. As of now, Apple has not responded to requests for further comment from The Verge.
Expert Analysis and Future Implications
Experts suggest that Apple’s policy changes could set a precedent for other tech companies navigating the complex regulatory landscape in the EU. The move is seen as a proactive step to mitigate further legal challenges and financial penalties.
The EU Commission will assess Apple’s proposed changes to determine compliance with DMA standards. The outcome could influence future regulatory actions and shape the competitive landscape for app developers across Europe.
The unfolding situation highlights the growing tension between major tech firms and regulatory bodies, with significant implications for the global digital economy.
