Apple this week revised its alternative contractual terms for devs selling apps in the European Union – a revision that was immediately dismissed by critics as more "malicious compliance."
The iBiz was one of six tech platforms designated last year as "gatekeepers" due to their respective market dominance by the European Commission. The others were Alphabet, Amazon, ByteDance, Meta, and Microsoft. Under Europe's competition law, the Digital Markets Act (DMA), gatekeepers face extra obligations to ensure that they compete fairly. Apple's anti-steering rules – which forbid developers from creating links in their apps that lead to external purchasing options – are among the practices disallowed by the DMA.
Against the backdrop of its antitrust battle with the US Justice Department, Apple in January announced business practice changes to accommodate Europe's new competition law, which become applicable in 2023.
The iPhone maker's initial concessions fell short of DMA requirements, and in June the European Commission published preliminary findings that the rule changes were insufficient.
Two months later, Cook et al have an amended rule book that applies to developers using "either the updated Alternative Terms Addendum for Apps in the EU [PDF] or the StoreKit External Purchase Link Entitlement (EU) Addendum [PDF]."
Essentially, Apple has allowed developers in the EU to choose whether they want to use its own In‑App Purchase system for App Store transactions or an alternative payment processor for In-App transactions. EU app developers can also choose to sell their apps through a third-party storefront.
The Alternative Terms contract covers: 1) In‑App Purchase system from the App Store; 2) alternative payment processors; and 3) linking out from apps.
The StoreKit addendum covers just linking out – it "allows the ability to link out for purchases of digital goods or services for apps distributed in the EU and includes new business terms for those transactions." It's not for in-app transactions.
The StoreKit contract doesn't include the Core Technology fee – assessed for devs using the Alternative Terms contract on app installs beyond one million at €0.50 for each app installed.
But it does come with two new fees: a 5 percent "Initial Acquisition Fee" and a 10/20 percent "Store Services Fee."
On iOS, under the Alternative Terms contract, Apple demands a 17 percent commission for apps sold in EU storefronts of the App Store, or 10 percent for App Store Small Business Program participants. Then there's the 3 percent payment processing fee, and the Core Technology fee is applicable.
There's also an Initial acquisition fee of 5 percent "for sales of digital goods and services, made on any platform, that occur within a 12-month period after an initial install." And there's a Store services fee of 10 percent "for sales of digital goods and services, made on any platform, that occur within a fixed 12-month period from the date of an install, including app updates and reinstalls."
Under the StoreKit Contract, the Initial acquisition fee is the same – 5 percent – but the Store service fee is 20 percent. For App Store Small Business Program participants or auto-renewal subscriptions beyond one year, that drops to 7 percent.
Fee calculation is complicated enough that Apple has built a web-based calculator for the task.
In a statement provided to The Register, Spotify said, "We are currently assessing Apple's deliberately confusing proposal. At first glance, by demanding as much as a 25 percent fee for basic communication with users, Apple once again blatantly disregards the fundamental requirements of the Digital Markets Act (DMA). The European Commission has made it clear that imposing recurring fees on basic elements like pricing and linking is unacceptable. We call on the Commission to expedite its investigation, implement daily fines and enforce the DMA."
It now falls to European regulators to decide whether Apple's latest proposal meets the requirements of the DMA.
Meanwhile, in the UK …
Apple's attempt to mollify the EU arrived alongside word that the United Kingdom's Competition and Markets Authority – as part of its Mobile Browsers and Cloud Gaming Market investigation – is contemplating uncomfortable remedies [PDF] against the fruiterer.
The CMA began looking into mobile browsers, browser engines, and mobile gaming distribution in 2022 and has issued a series of reports about its findings.
- Automation needed to fight army of AI content harvesters stalking the web
- Apple Intelligence beta lands in iOS 18.1, macOS 15.1 previews
- Oops. Apple relied on bad code while flaming Google Chrome's Topics ad tech
- Google's plan to drop third-party cookies in Chrome crumbles
The latest of these describes possible scenarios to make things right. Among the issues that concern the CMA are: Apple's requirement that all browsers on its mobile devices use its own WebKit rendering engine; Apple's and Google's dominance of browser engines; and Apple's rules that limit in-app browsers.
Some of the options being considered include: "Requirement for Apple to grant access to alternative browser engines to iOS"; "Requirement for Apple to grant equivalent access to iOS to browsers using alternative browser engines"; and "Requirement for Apple to grant equivalent access to APIs used by WebKit and Safari to browsers using alternative browser engines."
Google – which also could be required to make changes to address CMA competition concerns – was just deemed to be a monopolist in the US government's search advertising case. Depending on the outcome of its appeal, it may face its own set of as-yet-undecided US antitrust remedies.
The CMA is mulling whether to require Google "to grant equivalent access to APIs used by Chrome." And with regard to in-app browsers, the watchdog might demand that both Apple and Google offer ways to opt-out of in-app browsers.
The CMA's final report is due by March 16, 2025. ®