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Apple adds a nearly unlimited 20 percent fee for developers in the latest EU update


Apple adds a nearly unlimited 20 percent fee for developers in the latest EU update

Apple is revising its App Store rules in the EU after regulators accused the company of violating the Digital Markets Act (DMA) in June. At first glance, the updated rules appear to give developers more freedom to link to external purchases – but a restrictive new fee structure will force developers to pay Apple a commission on sales made through the EU market. any platform, not just iOS, as long as they contain external links.

Starting this fall, all developers in the EU will be able to insert links that lead to purchases outside of their apps. The updated rules allow developers to inform their users about offers on the web, in another app store, or elsewhere “in a location of their choosing.” Developers can insert as many links as they want, and users will have the option to disable in-app scare screens.

But using this feature comes with such high fees that it’s hard to imagine any developer taking advantage of it. Once a developer adds external links, Apple will impose a new “store service fee” on sales of digital goods and services made within one year of the date the user installs the app — on any platform, even if the user never clicks the external link. This could potentially include purchases made in an alternative app store or on a developer’s website from any type of device, such as a Windows computer. And if the user reinstalls or updates the app, the clock starts over. The fee is 20 percent for apps offered only through the App Store; apps that offer support for third-party app stores pay 10 percent, but face other associated fees.

Additionally, Apple charges a 5 percent “initial purchase fee” on digital goods and services purchased “on any platform” within one year of the app’s initial installation. In total, that means Apple can charge up to 25 percent commission on purchases made within one year of installation, including subscriptions and auto-renewals outside of the platform. Developers in Apple’s small business program and those who charge for “qualified” auto-renew subscriptions of more than one year can expect lower fees. The fees also do not apply to subscriptions or auto-renewals purchased before the app is downloaded.

“Apple’s terms make it completely uneconomical for developers to distribute their apps through both the Apple App Store and competing iOS app stores,” said Epic Games CEO Tim Sweeney in a post on X discussing the new rules.

Apple said the fees reflect the extensive value its App Store provides. The initial acquisition fee “reflects the value the App Store provides in connecting developers with customers in the EU,” while the Store service fee “reflects the ongoing services and features Apple provides to developers.”

Outside the EU, Apple charges a commission of up to 30 percent on in-app purchases. Apple also has strict rules about links to external purchase options. For example, developers must follow certain formatting guidelines, display external links only once, and display a notification (or “scare screen”) to warn users that they are leaving the app. All of this is one of the reasons Spotify doesn’t sell audiobooks in its iOS app.

The new fee structure comes as Apple tries to avoid further action from the EU. In June, regulators accused the company of violating DMA rules against antisteering, or preventing developers from directing users to cheaper purchasing options outside the App Store. The EU also fined Apple €1.84 billion (about $2 billion) for blocking music streaming apps like Spotify from displaying cheaper subscriptions outside the App Store.

The EU is currently investigating Apple over its restrictive policy towards alternative app stores and its new Core Technology Fee, which imposes a fee of 50 cents per install on third-party store developers for apps with over 1 million downloads. The DMA came into force in March and aims to regulate the big tech companies and promote competition in digital markets.

“We are currently reviewing Apple’s intentionally confusing proposal,” Spotify spokeswoman Jeanne Moran said in an email to The edge“Apple once again blatantly disregards the basic requirements of the Digital Markets Act (DMA). The European Commission has made it clear that charging recurring fees for basic elements such as pricing and linking is unacceptable. We call on the Commission to speed up its investigation, impose daily fines and enforce the DMA.”

Apple has already made some small changes to its DMA compliance plans after facing criticism from developers and EU regulators earlier this year. The company announced that developers of free apps would no longer have to pay the Core Technology Fee to access external app stores. It also gave developers a one-time opportunity to opt out of the company’s new terms and conditions, but only if they haven’t already launched an alternative app store or used a third-party payment method.

Apple’s recent changes bring some improvements, but come with the same limitations that make it difficult for developers to do business.

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