Apple Tweaks New EU App Store Business Terms After Developer Feedback

[pesc]

Pretending it’s not malicious doesn’t make it not malicious. You’re clearly unfamiliar with the EU’s modus operandi. They always start with softer terms that generally push companies to do the right thing. Sometimes it doesn’t work and stricter regulation follows. Look what happened with the USB charging ports l: their initial requirements were a lot more vague and were maliciously interpreted by Apple who just put a usb port on their charger and not on the actual phone. Unsurprisingly further and stricter regulation followed and Apple had to comply. The same will happen with DMA.

Regarding USB-C, you don't know what you are talking about (or worse).

Apple helped develop the USB-C standard in 2012.

USB-C - Wikipedia

en.wikipedia.org

The first Mac to use USB-C for charging was the 2015 MacBook. This was one of the first laptops to use USB-C

MacBook "Core M" 1.1 12" (Early 2015) Specs (Early 2015, MF855LL/A*, MacBook8,1, A1534, 2746): EveryMac.com

Technical specifications for the MacBook "Core M" 1.1 12" (Early 2015). Dates sold, processor type, memory info, hard drive details, price and more.

everymac.com

The first iPad to use USB-C charging was the 2018 iPad Pro.

iPad Pro 11" (Wi-Fi Only) 64, 256, 512 GB; 1 TB Specs (A1980, MTXP2LL/A*, 3221*, iPad8,1, iPad8,2**): EveryiPad.com

Specs and features for the iPad Pro 11" (Wi-Fi Only) 64, 256, 512 GB; 1 TB (A1980). Dates sold, capacity, battery life, networks, size, price and more.

everymac.com

None of the above was "thanks to EU". If you connect the dots you will see that Apple is (slowly) changing all electrical connectors to USB-C.

 

[laptech]

Of course what Apple is doing is anti-competitive because they are basically saying to developers 'stay with us and there are no extra fee's but move away from us and you incur extra fees'. Such extra fee's is to deter developers from moving to alternative app marketplaces. Now Apple has officially introduced the extra fee's into the new T&C's the EU will in my opinion again take action against Apple. The EU could not do anything until Apple released the new T&C's because there was no way of knowing just what exactly Apple was going to do and how the T&C was going to be worded. Now the new T&C has been released, the EU can say that the introduction and purpose of the Core Technology fee is to deter developers moving their app's to an alternative marketplace in the EU and that to do so is anti-competitive .

 

[pesc]

On what grounds? There is no entitlement to profit. Complying with the law is just the cost of doing business.

The EU or its developers are not entitled to use Apples IP for free. Apple collects the fee for its IP as either (1) 99$/year plus 15-30% of in-app purchases, or (2) in the EU a CTF of €0.5 per download (first 1M free).

If the EU says that Apple cannot charge a fee for its IP (because "gatekeeper"), then EU would not follow the TRIPS rules it has signed and would likely be charged for that under the WTO.

Is DMA at odds with TRIPS?

TRIPS Agreement - Wikipedia

en.wikipedia.org

 

[vladi]

The EU or its developers are not entitled to use Apples IP for free. Apple collects the fee for its IP as either (1) 99$/year plus 15-30% of in-app purchases, or (2) in the EU a CTF of €0.5 per download (first 1M free).

If the EU says that Apple cannot charge a fee for its IP (because "gatekeeper"), then EU would not follow the TRIPS rules it has signed and would likely be charged for that under the WTO.

Is DMA at odds with TRIPS?

TRIPS Agreement - Wikipedia

en.wikipedia.org

Apple being one of those who charges developer annual fee is something you can count on both of your hands worldwide.

 

[MilaM]

Of course what Apple is doing is anti-competitive because they are basically saying to developers 'stay with us and there are no extra fee's but move away from us and you incur extra fees'.

It's funny in a way. The case against Apple was already pretty good. But now they have given the Commission extra arguments for free, haha.

 

[MilaM]

None of the above was "thanks to EU". If you connect the dots you will see that Apple is (slowly) changing all electrical connectors to USB-C.

I agree with most of your points. Nevertheless, Apple Execs publicly complained about the USB-C mandate. I think they originally planned to make the switch later.

 

[d686546s]

The EU or its developers are not entitled to use Apples IP for free. Apple collects the fee for its IP as either (1) 99$/year plus 15-30% of in-app purchases, or (2) in the EU a CTF of €0.5 per download (first 1M free).

If the EU says that Apple cannot charge a fee for its IP (because "gatekeeper"), then EU would not follow the TRIPS rules it has signed and would likely be charged for that under the WTO.

Is DMA at odds with TRIPS?

TRIPS Agreement - Wikipedia

en.wikipedia.org

It's still an open question what the Commission will say, but I highly doubt they will say that Apple "cannot charge a fee." They may say that Apple cannot do so in a way that is discriminatory or anti-competitive.

I don't know TRIPS to any level of detail, but if you can make a convincing argument for why the DMA would violate it go ahead. But please be specific.

 

[MilaM]

It's still an open question what the Commission will say, but I highly doubt they will say that Apple "cannot charge a fee." They may say that Apple cannot do so in a way that is discriminatory or anti-competitive.

Some may wonder why the rules of the DMA are so convoluted and the measures rather indirect. The reason is that, if at all possible, the Commission will prefer to address concrete anticompetitive provisions in Apple's or Google's terms of service, instead of mandating their own solutions.

So in the example above, they could say, that Apple can collect a platform fee, but only if they also collect it in their own store as well. This way, they don't dictate the business terms as such, but create a level playing field for the App Store vs. alternative stores.

 

[pesc]

I agree with most of your points. Nevertheless, Apple Execs publicly complained about the USB-C mandate. I think they originally planned to make the switch later.

I love the USB-C standard. And I am looking forward to my next iPhone having USB-C for charging. But I still think the EU USB mandate is wrong.
1. The iPhone would get USB-C charging anyway
2. Is USB-C the end of development? The last connector? Who will develop the successor, the EU? What if Apple (or someone else) wants to make a new phone that is completely watertight with no external ports and only inductive charging, like the Apple watch. That you could dive with like the AW Ultra. Are they allowed to sell it in the EU?

 

[MilaM]

1. The iPhone would get USB-C charging anyway
2. Is USB-C the end of development? The last connector? Who will develop the successor, the EU? What if Apple (or someone else) wants to make a new phone that is completely watertight with no external ports and only inductive charging, like the Apple watch. That you could dive with like the AW Ultra. Are they allowed to sell it in the EU?

I haven't read the whole regulation regarding the charging standard. But I believe that most if not all problems you have mentioned have been adressed by the law. Specifically watertight devices are not prohibited by it and don't have to have the USB-C socket.

 

[RickDEGH]

i would personally but that’s why businesses prefer sociopaths to make the tough decisions to cause harm for shareholder benefit

it takes a certain kind

Aren’t we all so innocent when we’re born? Takes environment, opportunities, etc to mould us into what we eventually become. The same factors (as in the case of those in charge of Apple) haven’t been applied to you, yet, so you can’t be so sure 😀

 

[pesc]

Of course what Apple is doing is anti-competitive because they are basically saying to developers 'stay with us and there are no extra fee's but move away from us and you incur extra fees'. Such extra fee's is to deter developers from moving to alternative app marketplaces. Now Apple has officially introduced the extra fee's into the new T&C's the EU will in my opinion again take action against Apple. The EU could not do anything until Apple released the new T&C's because there was no way of knowing just what exactly Apple was going to do and how the T&C was going to be worded. Now the new T&C has been released, the EU can say that the introduction and purpose of the Core Technology fee is to deter developers moving their app's to an alternative marketplace in the EU and that to do so is anti-competitive .

Not true. If a developer stays with the old program the fee is $99/year plus 15-30% of in-app purchases. The new program doesn't have the charge on in-app purchases but charges through the CTF instead. Both programs have fees for Apple's IP.

For some business models the new program is more lucrative for the developer. Check the calculator. https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/

The EU may indeed take action and challenge the new program. We will see. But I don't think we will end up with that EU developers will be completely free of fees, as some commentators (or Spotify) seem to think.

 

[toobravetosave]

Aren’t we all so innocent when we’re born? Takes environment, opportunities, etc to mould us into what we eventually become. The same factors (as in the case of those in charge of Apple) haven’t been applied to you, yet, so you can’t be so sure 😀

i’m pretty sure at this point i’m not capable of psychobusiness but hey it’s good to hold out hope i suppose

 

[d686546s]

Not true. If a developer stays with the old program the fee is $99/year plus 15-30% of in-app purchases. The new program doesn't have the charge on in-app purchases but charges through the CTF instead. Both programs have fees for Apple's IP.

For some business models the new program is more lucrative for the developer. Check the calculator. https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/

The EU may indeed take action and challenge the new program. We will see. But I don't think we will end up with that EU developers will be completely free of fees, as some commentators (or Spotify) seem to think.

Yes we will see. Specifically regarding the CTF, I think a challenge we will see is that it disadvantages providers of alternative app stores (AASs) because developers who want to distribute apps via AASs will incur fees that they do not if they distribute via the App Store.

In practice this will mean that it will never be really viable to have an app like Amazon on an AAS because these apps are generally free, while at the same time driving traffic to an AAS.

I wouldn't be surprised if mashing together fees for using Apple's technology that isn't strictly related to the App Store and App Store commissions wasn't seen as anti-competitive, but that remains to be seen.

 

[laptech]

Not true. If a developer stays with the old program the fee is $99/year plus 15-30% of in-app purchases. The new program doesn't have the charge on in-app purchases but charges through the CTF instead. Both programs have fees for Apple's IP.

For some business models the new program is more lucrative for the developer. Check the calculator. https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/

The EU may indeed take action and challenge the new program. We will see. But I don't think we will end up with that EU developers will be completely free of fees, as some commentators (or Spotify) seem to think.

You did not read my post properly, I said 'extra' fee's, not just fee's

 

[Beautyspin]

As far as I know the EU have not yet formally responded to Apple's plans, so we don't actually know whether Apple's new terms will survive contact with the enemy.

I'm not an EU lawyer, or a competition lawyer for that matter, but the core technology fee at least seems like a clear anti-competitive measure to me and I find it difficult to believe that it would be compliant with either the DMA or other competition legislation.

It's a fee that's only levied on apps using competitors' stores or payment services, but not its own offerings. The EU will likely argue that if Apple thought app developers should pay for using their core technology, they should do so consistently. Why should a free app, and some very large ones at that like Amazon that clearly drive traffic to a store, be completely free to distribute on the App Store but be 'taxed' by Apple elsewhere. It's clearly a deterrent for competition and an attempt to benefit its own store.

Looks like Apple cannot have any impediments of any type to allowing alternate stores on its platform. The EU will start with separate session with each Gatekeeper and tell them how to modify their proposals to enable this. If they (Gatekeepers such as Apple, Alphabet, and others) do not change to enable alternate stores, then they will be forced to through fines and may eventually break up the companies. However, she says that their intention is not to levy fines or break up the companies but to allow alternate stores. If Apple does that, then they will be fine. I do not think Core Technology Fee will survive.

 

[TimFL1]

The revenue from the EU is much higher than the worldwide revenue from the App Store, including all fees and ads. Apple is kicking and screaming to delay these changes and get some more profit, but eventually Apple will comply.

I think Apple knows this is less than the bare minimum or what constitutes "compliance". They are slow playing until the EU forces full sideloading, which I fully expect to happen after Apple's proposal.

This. It‘s simply Apple trying to keep that cash cow going for a little while longer. Classic stalling tactic before they are forced to come up with alternatives that cut even more into their revenue.

 

[Mother Nature]

Hard to see this being found to be in compliance.

The "Core Technology Fee" and deliberately worse terms on the App Store for those choosing to also make their apps available on other app stores is extremely anti-competitive, and an obvious attempt to discourage developers from making their apps available on alternative stores. Not by competing by having the better store themselves, but by abusing their market power to set punishing terms for anyone daring to try another option.

Exactly the sort of behaviour the DMA seeks to prevent.

The fact is that Developers want to have sideloading enabled so they can offer users to sideload their app and avoid the apple cut, but Apple will not allow this, because there are many things apple offer to developers (including the access to a large number of users globally), that either way they should pay.

This is what bothers Epic and Spotify, that directly or through sideloading, they still have to pay Apple, which is totally deserved.

 

[firewood]

On what grounds? There is no entitlement to profit. Complying with the law is just the cost of doing business.

There is also no requirement for a person or company to do business in a foreign country if there is no profit doing so.

 

[d686546s]

There is also no requirement for a person or company to do business in a foreign country if there is no profit doing so.

Yes? What does that have to do with a class action lawsuit?

 

[turbineseaplane]

The fact is that Developers want to have sideloading enabled so they can offer users to sideload their app and avoid the apple cut, but Apple will not allow this, because there are many things apple offer to developers (including the access to a large number of users globally), that either way they should pay.

How’s that different than macOS?

 

[Tailpike1153]

Apple can change its ways...
when forced to...
by an uber governmental entity wielding a 4-ton mace.

I'll change myself. I will go hug a Windows user. The Linux user has a restraining order...

 

[Mousse]

Well if you distribute your app for free, no reason to have to pay the CTF, just stay in the existing developer terms and only pay Apple your $99 developer account fee. If you are making money from your app, then $.50 per device per year is nothing in the scheme of things, and certainly less money than having to pay Apple 15/30% commission. They have given developers alternatives. No one said that had to give away their IP for free, including the DMA.

Unless Apple also get a cut of in app DLC, those freemium--free to play, pay to win--games would be better off in the alt store. I would be glad not to see anymore pay to win games.