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Business News/ Technology / EU warns Apple of strict consequences if App Store modifications fall short of regulations

EU warns Apple of strict consequences if App Store modifications fall short of regulations

Apple could face consequences if its modifications to the App Store don't align with upcoming EU regulations, warned the bloc's industry chief. Apple's changes include allowing developers to distribute apps through alternative app stores and opt out of using Apple's in-app payment system.

For representation purposes (REUTERS)Premium
For representation purposes (REUTERS)

Apple is set to face stringent consequences if its modifications to the App Store fail to align with the upcoming regulations introduced by the European Union, warned the bloc's industry chief on Friday. 

In an effort to comply with the EU's impending Digital Markets Act (DMA), Apple has announced that it will permit software developers to distribute their applications on Apple devices through alternative app stores. Starting from early March, developers will have the option to provide alternative app stores on iPhones and opt out of utilizing Apple's in-app payment system, which currently imposes commissions of up to 30%.

Despite these adjustments, critics argue that Apple's fee structure remains unjust, potentially violating the DMA. Responding to inquiries about Apple's plans, EU industry chief Thierry Breton told Reuters, "The DMA will open the gates of the internet to competition so that digital markets are fair and open. 

Change is already happening. As from 7 March, we will assess companies' proposals, with the feedback of third parties." Breton emphasized that if the proposed solutions fall short, the EU will not hesitate to take robust action.

Under the new EU regulations, developers will still need to submit their apps to Apple for review regarding cybersecurity risks and apparent fraud. Furthermore, Apple device users in the EU will gain the ability to select default web browsers and contactless payments apps, allowing them to make payments without relying on the Apple Pay system.

Despite the option for developers to avoid using Apple's App Store and payment system, a "core technology fee" of 50 euro cents per user account per year will still be mandatory. Apple clarified that this fee applies only to developers opting into the new business terms. 

The company estimates that under the new terms, 99 percent of developers in the EU would either reduce or maintain their fees owed to Apple. Larger companies like Meta and Spotify, with millions of free users, are anticipated to be more significantly affected. As of now, neither company has provided immediate comments on the matter.

(With inputs from Reuters)


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Published: 27 Jan 2024, 11:26 AM IST
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