Apple has announced significant changes to its App Store following accusations from the European Union (EU) that the tech giant violated the bloc’s new Digital Markets Act (DMA). The EU charged Apple with restricting app developers from directing consumers to alternative payment methods, making it the first company to face such accusations under the DMA.
In response, Apple revealed that starting this autumn, developers within the EU will have greater freedom to promote and sell their products through alternative channels, including other app marketplaces. This marks a shift from the previous requirement that developers could only redirect users to external websites for transactions.
However, Apple introduced a new fee structure as part of these changes. Developers will now be required to pay a 5% fee on sales of digital goods and services made through any platform within a year of a user first installing an app that includes a link to an alternative payment channel.
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The EU’s antitrust regulator, the European Commission, will review Apple’s compliance with these new measures, considering feedback from the market and developers. The DMA, which seeks to increase competition in the digital space, gives the EU the authority to impose fines of up to 10% of a company’s global turnover, with the potential to rise to 20% for repeat violations. Apple, whose total revenue reached $383 billion in the year to September 2023, could face daily penalties of up to 5% of its average daily global turnover if found non-compliant.
The Coalition for App Fairness, including members like Spotify, criticized Apple’s latest move, accusing the company of creating “another confusing, arbitrary, and expensive fee structure” that complicates the digital marketplace for developers and consumers in Europe.
Apple’s ongoing battles with the EU have been intense, with the company previously fined €1.8 billion ($2 billion) in a separate probe related to its App Store practices following a complaint from Spotify. As the DMA rolls out, other tech giants like Google, Meta, Amazon, and Microsoft are also under scrutiny to comply with the new rules, which are designed to curb monopolistic practices and foster greater competition in the digital economy.
