Apple’s Proposed Revisions Contradict the Objectives of the DMA

By Maggie Last updated Jan 27, 2024

For nearly five years – a span of 1,782 days – we have consistently urged the European Commission to take decisive action against Apple. In a global landscape that prioritizes competition and innovation, allowing gatekeepers like Apple to operate without constraints was deemed unacceptable.

Our optimism soared when the Digital Markets Act (DMA) came into existence, signaling an end to the perceived stifling of innovation under the guise of security measures by Apple. Europe, by leading the charge, showcased a commitment to fostering fair competition. However, Apple’s recent actions have laid bare their belief that rules do not apply to them.

Apple’s behavior remains consistent, and its latest move represents an unprecedented level of arrogance. Under the guise of compliance and concessions, they presented a new plan that is nothing short of a charade. The old tax system was deemed incompatible with the DMA, prompting Apple to introduce a seemingly compliant alternative, which, upon closer inspection, proves otherwise.

From the outset, Apple has made it clear that they are not enthusiastic about adhering to the DMA. Consequently, they have devised an unappealing alternative to the existing status quo. Many popular developers are unlikely to embrace it, and for those forced to consider it, the path is fraught with potential penalties for their success. Let’s delve into some aspects of Apple’s new demands:

A new annual fee of 0.50 Euro cents per download, indefinitely, payable to Apple for the privilege of existing on iOS – This amounts to extortion. Why, when Apple already charges a commission of 17% (and 10% for recurring payments) on digital goods, should developers also pay an annual fee for every user? This puts an additional burden on developers, especially start-ups and those offering free apps, potentially hindering growth.
Apple continues to impose a 17% commission on developers even if they provide alternative payment methods or link to their own websites – Apple is complicating the choice for developers by stating, ‘you can link out or offer your own payment methods, but you still owe us a commission (plus the new 0.50 cent Euro fee).’ This makes the DMA even more burdensome for developers, offering an impractical alternative that stifles their businesses.
Apple claims to offer alternative app stores, but the reality is questionable – Spotify and other developers face an untenable situation under the new terms. Staying in the App Store and offering in-app payments incurs commissions and additional fees, while existing only in an alternative app store does not provide a viable solution. This could substantially increase customer acquisition costs for developers.

The undeniable conclusion is that Apple is compelling developers to adhere to the existing status quo, negating the DMA’s goal of providing more choices and control to consumers. Apple’s proposed alternative effectively binds developers to a system that contradicts the DMA’s objectives.

In the aftermath of Apple’s announcement, developers rushed to input their business numbers into Apple’s online ‘fee calculator,’ only to find their worst fears confirmed. Apple wields control with confidence, seemingly expecting the European Commission to acquiesce.

Earlier this week, our plans to offer customers in the EU more choice, control, and enhanced experiences seemed promising. Today, the future appears less clear. The pivotal question now looms: Will the European Commission uphold its commitment to rectify Apple’s abuse of power, as outlined in the DMA? Or will the DMA, in practice, lack substantive meaning for most developers?

Enforcing the law is all that is needed. The ball is in the European Commissioners’ court, and they must decisively reject this blatant disregard for the principles they diligently worked to establish.