Apple Updates EU App Store Rules Amid Commission Disagreements

Apple announced on March 14, 2024, that it is implementing significant changes to its App Store business terms and rules for alternative app distribution within the European Union. The company stated that these revisions are intended to resolve ongoing "disagreements with the Commission over business terms and alternative distribution." This move comes as a response to regulatory scrutiny and potential enforcement actions by the European Commission under the Digital Markets Act (DMA).

The core of the updated terms involves consolidating all developers distributing apps within the EU under a single set of business terms. This aims to create a more uniform and potentially more compliant framework for developers operating in the region. A key aspect of the changes is the introduction of a new "Core Technology Fee" (CTF) that developers will be required to pay. This fee is set at €0.50 (approximately $0.54) per first-time annual download of an app after it surpasses one million downloads in a 12-month period. This tiered fee structure is designed to apply to developers whose apps are downloaded by EU users, regardless of whether the app is distributed through the App Store or an alternative marketplace.

Furthermore, Apple is introducing a new framework that allows developers to offer alternative in-app payment systems. Previously, developers were largely restricted to using Apple's own in-app purchase system, which typically takes a commission of 15% to 30% on transactions. Under the new rules, developers can opt to use third-party payment processors, though Apple has indicated that a CTF will still apply to these transactions. This is a significant shift from Apple's long-standing policy and represents a concession to the DMA's requirements for interoperability and fair competition. The company is also adjusting its commission structure, with a reduced rate of 3% for transactions processed through Apple's system for developers who meet certain criteria, and a 6% rate for those using alternative payment systems for digital goods and services.

These adjustments are a direct consequence of the EU's Digital Markets Act, which designates large online platforms, known as "gatekeepers," and imposes specific obligations to ensure fair competition and user choice. Apple, identified as a gatekeeper, has been under pressure to open up its ecosystem to greater competition. The company has previously made concessions in other markets, such as the United States, in response to legal challenges and regulatory pressure. The EU's approach, however, has been particularly stringent, leading to these comprehensive revisions for the European market. The European Commission will be closely monitoring the implementation of these new rules to ensure they comply with the DMA's objectives and that developers are indeed afforded greater choice and fairer terms.