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DMA: Apple ends App Store monopoly

However, company introduced additional fees for third-party app stores, which could prove contrary to European regulations.

Digital Sovereignty - January 31, 2024

On January 25, 2024, Apple outlined all the changes made to their iOS environment in order to comply with the Digital Markets Act (DMA). The European regulation, which will be implemented on March 7, 2024, aims to put an end to the anticompetitive practices of digital giants, and open up the European digital market to all players.

In particular, Apple agreed to end the App Store’s monopoly on iOS apps and now allows vetted third-party app stores. The company will however continue to prohibit direct downloads, and maintain a say in which iOS apps can be published outside the App Store.

The change also introduces a new commissions system on app purchases and in-app purchases. Publishers who continue to use the App Store will benefit from reduced commissions, which will drop from 15% and 30% to 10% and 17%, respectively. Apple payment system users will add a 3% transaction fee.

There will be no fixed commission on apps marketed by third-party stores, but they will have to pay a new charge: the “Core Technology Fee.” Meant to compensate for Apple’s investment in its platform, it amounts to 50 eurocents per download beyond a million installs.

App publishers strongly criticized the system, which they deem contrary to the DMA’s objective. “Apple’s proposal forces developers to choose between two anticompetitive and illegal options. Either stick with the terrible status quo or opt into a new convoluted set of terms that are bad for developers and consumers alike,” thus explains Rick VanMeter, Executive Director of the Coalition for App Fairness.

Apple’s ‘plan’ is a shameless insult to the European Commission and the millions of European consumers they represent – it must not stand and should be rejected by the Commission,” he added. Failure to comply with the DMA exposes the offender to up to 10% of their yearly global sales in fines.

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