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US gadget giant Apple has announced a number of concessions in response to the Digital Markets Act that seem to continue its strategy of bad-faith regulatory compliance.
January 26, 2024
When politicians and other wannabe tyrants seek to impose their will on the rest of us, they often do so in the name of ‘safety’. For example, Ofcom is now empowered to censor the internet in order to protect UK citizens from the horrors of unfettered online speech. In response to new rules set out on the EU’s Digital Markets Act, Apple has issued what can only be described as a petulant press release, describing measures taken “to reduce privacy and security risks the DMA creates”.
“Apple today announced changes to iOS, Safari, and the App Store impacting developers’ apps in the European Union (EU) to comply with the Digital Markets Act (DMA),” opens the release. “Across every change, Apple is introducing new safeguards that reduce — but don’t eliminate — new risks the DMA poses to EU users. With these steps, Apple will continue to deliver the best, most secure experience possible for EU users.”
“The changes we’re announcing today comply with the Digital Markets Act’s requirements in the European Union, while helping to protect EU users from the unavoidable increased privacy and security threats this regulation brings,” said former Apple head of marketing Phil Schiller in the press release. “Our priority remains creating the best, most secure possible experience for our users in the EU and around the world.”
Tech commentator MG Siegler has published a good analysis of the unbridled passive aggression contained within the release, which seems explicitly designed to antagonise the EU.
Probably the most contentious aspect of how Apple manages the de facto monopoly it imposes on users of its devices is the conditions it attaches to its App Store. Historically Apple has mandated all iOS apps to use its own payment processing platform, for which it charges a hefty commission. In the US Apple has been forced to allow external links from iOS apps but has been accused of ‘bad-faith’ in its implementation.
Similarly, it seems the DMA has compelled Apple to make a number of concessions towards opening up the App Store in the EU. Here’s how they are summarised in the press release.
Developers operating under the new business terms will have the option to distribute their iOS apps from the App Store and/or alternative app marketplaces. These developers can also choose to use alternative payment processors in their EU apps on the App Store, across Apple’s operating systems.
The new business terms for iOS apps in the EU have three elements:
Reduced commission — iOS apps on the App Store will pay a reduced commission of either 10 percent (for the vast majority of developers, and subscriptions following their first year) or 17 percent on transactions for digital goods and services.
Payment processing fee — iOS apps on the App Store can use the App Store’s payment processing for an additional 3 percent fee. Developers can use a payment service provider within their app or link users to their website to process payments for no additional fee to Apple.
Core Technology Fee — iOS apps distributed from the App Store and/or an alternative app marketplace will pay €0.50 for each first annual install per year over a 1 million threshold.
The first two points seem like substantial concessions but the third, not so much. Unsurprisingly, Apple’s principal App Store antagonist – Epic Games – smells a rat.
Of course Apple is going to vigorously protect the obscene amount of revenue it extracts from its app store but its apparent belief in the righteousness of its cause seems to be clouding its judgment. The more Apple insists its exorbitant rents are only imposed in the name of safety, the greater the outward absurdity of its position becomes. It’s essentially throwing the gauntlet down to regulators and it will be fascinating to see how they respond.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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