Apple announces App Store policy changes in the EU

Apple announced major updates to its App Store policies in the European Union yesterday under the Digital Markets Act (DMA) including new app distribution for EU-based developers and a new two-tier system for Store Services fees on purchases made outside of apps.

EU devs are now free to advertise in-app offers for digital goods and services via external websites, other apps, and alternative app marketplaces. Developers can also include multiple URL destinations inside their apps with redirects and tracking.

Apple’s notorious scare screens, which users see when they tap an external link, can now be turned off after the first interaction within apps. Developers can also design their own interfaces for links to outside payments and promotions.

Apple is also bringing a new Core Technology Commission which mandates 5% commission on outside App Store purchases made for apps distributed on the App Store. Apple is also retaining its Core Technology Fee (CTF), which charges €0.50 per download for each annual install over 1 million. There’s also a new initial acquisition fee which adds a 2% fee on digital goods and services purchases outside of the App Store by new users in the first six months following an app download.

Alongside those changes, Apple is introducing a new two-tier system for Store Services fees. Developers will be able to move between the two tiers on a per-app basis once per quarter.

Tier 1 offers developers a lowered 5% commission on in-app purchases but severely limits key features like automatic app updates, automatic app downloads, search suggestions, ratings and performance metrics.

Tier 2 asks for a higher 13% commission (10% for Small Business Program members) with developers getting access to all key features provided by the App Store for their apps

Epic Games CEO Tim Sweeney criticized Apple’s new approach, calling the new Tier 1 list a “mockery of fair competition” and “unlawful”.

Apple’s new Digital Markets Act malicious compliance scheme is blatantly unlawful in both Europe and the United States and makes a mockery of fair competition in digital markets. Apps with competing payments are not only taxed but commercially crippled in the App Store.…

So, how did we get here?

Back in April, the European Commission (EC) issued a preliminary fine worth €500 million over Apple’s continued anti-competitive App Store practices including steering and preventing users from using alternative payment platforms all of which were in violation of the DMA. Apple later appealed the decision on a privacy basis, but that was not enough for the EC. The Commission will now evaluate Apple’s new policies affect consumers under the DMA.

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