Apple Faces Criticism from Developers Over App Store Policy Changes
Amidst the proposed changes in the App Store policy, Apple is facing a new wave of criticism from prominent app developers, including Spotify and Epic Games. These changes are aimed at aligning with the upcoming Digital Markets Act (DMA) of the European Union (EU).
The CEO of Spotify, Daniel Ek, expressed his dissatisfaction with Apple’s proposal, calling it a “creative example of distortion” and mocking “the spirit of the law and those who write it.” Elon Musk, the owner of X (formerly known as Twitter), joined in, stating that it is “very disturbing.” Tim Sweeney, the CEO of Epic Games, also mentioned that Apple’s plan is a “deceptive new example of harmful compliance.”
What are the proposed changes by Apple?
On January 25th, Apple announced a series of changes that will be implemented in iOS, Safari, and the App Store for users in 27 EU countries, starting from March 2024. These changes are part of the company’s efforts to comply with the EU’s Digital Markets Act, after being recognized as one of the six “gatekeepers” alongside Meta, Alphabet, Amazon, ByteDance, and Microsoft in September 2023.
The European Commission also listed Apple’s App Store, Safari, and the iOS operating system as “core platform services” that need to comply with the obligations under the DMA by March 2024. Failure to comply with these obligations can result in fines up to 10% of the company’s total annual turnover, and for repeated violations, the fines can go up to 20%.
As part of these changes, Apple will allow innovative third-party applications on iOS. This includes enabling market creators to install and manage apps on behalf of other developers through a dedicated marketplace app, as well as providing a new application programming interface (API) and tools that allow developers to offer their iOS apps through these alternative app stores.
Users will also have the option to choose an external app store as the default on their devices.
Users will be able to download external app stores from their official websites. However, apps distributed through these alternative stores will need to be notarized by Apple. The company stated that this process will involve a combination of automated checks and manual reviews to ensure the apps are free from known malicious software, viruses, and other security threats.
External stores will also need authorization from Apple, granting them access to new app store frameworks and APIs that allow them to receive and download notarized apps from Apple Developer Program members, among other things.
Developers can utilize the new distribution tools called Apple’s App Store Connect to inform users about app updates. This means that Apple will still have control over the app distribution process, arguing the need to limit privacy and security risks that these new options may pose to Apple users and their devices.
Apple also requires a credit security letter of €1,000,000 from a top-rated (“A-rated”) financial institution to open an alternative app store in the region.
Fair commission principle, but with a catch
Apple is also introducing changes to its commission structure as part of the new business terms for app developers in the EU. Developers who wish to avail themselves of the new opportunities for alternative distribution or payment processing must accept these new terms, as stated by the company.
Under the new terms, iOS apps in the App Store will pay a commission of 17% on sales of digital goods and services, instead of the previously applicable commission of 30%. Apps that are part of the App Store Small Business program (companies generating up to $1 million annually) or automated subscription renewals after the first year will pay a commission of 10%.
Developers who opt to use Apple’s payment system will incur an additional fee of 3%. Alternatively, they can use a payment service provider within their app or redirect users to their website for payment processing without any additional charges from Apple.
Apple is also introducing a new type of fee called the Core Technology Fee, which will apply to apps distributed through both the App Store and alternative app stores. Developers will have to pay €0.50 for each first-year installation exceeding 1 million installations, regardless of the distribution channel. This will also apply to developers who choose not to use the App Store or Apple’s payment systems in the region.
Apple claims that over 99% of developers will “reduce or maintain fees” under the new business terms, and “less than 1%” of developers will have to pay the Core Technology Fee.
Why are developers criticizing this move?
Undoubtedly, Apple’s App Store policy has faced criticism from developers in recent years, and even led to antitrust investigations in several countries, including India.
However, the latest point of contention in this battle seems to be the Core Technology Fee, which significantly impacts larger app producers and other digital services.
FAQ:
1. What are the proposed changes by Apple in the App Store policy?
Apple is proposing a series of changes aimed at aligning with the EU’s Digital Markets Act. The changes include allowing the installation and updating of external apps on iOS, the option to choose an external app store as the default, and introducing a new Core Technology Fee.
2. What is the Digital Markets Act (DMA)?
The Digital Markets Act (DMA) is a regulation by the European Union that aims to regulate digital giants and ensure fair competition in the market.
3. What is DMA?
DMA is the acronym for the translated term Digital Markets Act.
4. What will be the consequences for Apple if it fails to comply with the obligations under DMA?
In case of non-compliance with the obligations under DMA, Apple can be fined up to 10% of its total annual turnover, and for repeat violations, the fine can go up to 20%.
5. What is the App Store?
The App Store is a platform for app distribution created by Apple. It is the place where users can download apps for their iPhone and iPad devices.
6. Will developers be able to use other app stores on iOS?
Yes, according to Apple’s proposed changes, developers will have the option to use other app stores on iOS, which will be provided by innovative third-party apps.
7. What are the reactions of developers to Apple’s proposed changes?
Developers, including Spotify and Epic Games, have criticized Apple’s proposed changes. They accuse the company of deceptive compliance with the DMA regulations.
The source of the article is from the blog lokale-komercyjne.pl