To comply with European regulations, Apple has proposed reducing its commission on app sales while adding new fees and hurdles.
After 15 years of dictating how apps are distributed on iPhones, Apple has been forced to take marching orders from European regulators. A new law to bolster tech competition has demanded that Apple open its devices to competing app stores and payment alternatives.
But app makers say Apple’s response to the law, which is intended to give consumers and developers more choice, is a false choice. Tucked inside the plan, they argue, are new fees and rules that make it prohibitively expensive and risky to make the changes that the law was intended to bring.
The backlash is the latest chapter in a long-simmering fight between Apple and app makers. Apple says it must keep a tight grip on the App Store to ensure quality and safety, while many developers say the company rules with an iron fist and abuses its power to squeeze them for fees and thwart competition to its own services like Apple Music and Apple Pay.
European regulators largely sided with developers in writing the Digital Markets Act, a 2022 law that requires Apple to give app makers alternatives for selling to iPhone and iPad users. In response to a March deadline for compliance, Apple told developers last week that they essentially had three options in the European Union, home to roughly 450 million people.
They could stick with the status quo App Store system and continue paying Apple up to a 30 percent commission of all sales. Alternatively, they could reduce their commission to 17 percent, while taking on a new 50-euro-cent charge on every download above one million annually. Or they could avoid Apple’s commission by distributing through a competing app store, while still paying Apple’s download fee.
After doing the math, many developers said Apple was offering a worse alternative. Several pointed out that a maker of a free app with 10 million downloads a year that opted to distribute through a competing app store would owe Apple about $400,000 a month because of the new 50-euro-cent fee, according to a fee calculator that Apple released. That essentially guaranteed that they would stay with the existing App Store model, where they can distribute free, rather than sell through alternative marketplaces.