Politicians in Brussels have for years debated how best to loosen Big Tech companies’ grip over their closely guarded marketplaces. But it was only this week that Apple announced sweeping and drastic changes for its European users. For the first time, new EU rules have forced the company to entertain the idea that you can shop for apps outside of Apple’s own App Store, as well as allow browsers other than Apple’s own Safari to run on iOS with their full suite of features.
Yet critics say those changes, although drastic, do not go far enough to comply with new EU rules, and a new fee system for developers reveals how Apple is not yet ready to release its grip on the App Store.
“The new fees and restrictions simply reinforce Apple’s hold over its ecosystem,” Andy Yen, founder and CEO of Swiss encrypted email and VPN provider, Proton, said in response to the changes.
For more than a decade, iPhones have acted like tightly controlled supermarkets. Developers can’t just wander in and sell their wares. Instead, their app needs to pass a vetting process to sit on the shelves of Apple’s lauded App Store. If they want to sell something within their app to Apple users? That’s fine. But for the biggest developers, Apple is going to take a hefty 30 percent cut of every purchase.
Then, four years ago, lawmakers in Brussels started to listen seriously to complaints by the likes of Spotify about how Apple’s “tax” was stifling competition and limiting consumer choice as they browsed the App Store’s aisles. The European Union’s solution was a law called the Digital Markets Act (DMA). The idea wasn’t to break up Big Tech, former French digital minister Cédric O explained in a press conference in 2022. Instead the law was designed to break these platforms open.
On January 25, the EU seemed like it was finally starting to succeed in that mission, when Apple shared the first details of how the residents of the EU’s 27 member states will soon be able to download apps from alternative app stores onto their iPhones and iPads. Developers will also be able to use third-party payment providers inside apps offered by the Apple App Store for free, and will pay a reduced commission of up to 17 percent for in-app goods and services, the company said.
For Apple, the announcement marks a major change, and also demonstrates to other parts of the world what is possible with strongly worded regulation. The DMA gives the EU power to fine tech companies up to 20 percent of their global revenue for non-compliance. But the caveats in Apple’s announcement also drew sharp criticism.
Apple made it clear the company will maintain an element of control over the apps and new app stores operating on its devices—arguing this was necessary to reduce “privacy and security risks.” Apple said it will use a new system to track alternative app stores and payment systems, while charging developers a €0.50 ($0.54) “core technology fee” for every download—made through Apple’s App Store or an alternative—once an app is downloaded more than one million times.
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