Apple’s app store gets makeover in move to dodge future EU fines
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Apple Inc. has offered to overhaul its App Store to appease European Union antitrust watchdogs who issued an ultimatum after doling out a $580 million fine.
The iPhone maker’s proposal is designed to make it cheaper and less onerous for third-party developers to direct customers away from the Apple ecosystem to make payments elsewhere.
The pledge, following weeks of fraught discussions with EU regulators, is an attempt to dodge future penalties for failing to fix alleged violations of the bloc’s Digital Markets Act, which led to the fine in April. Despite the offer, Apple has said it plans to appeal the penalty through the bloc’s courts in Luxembourg. The company has a deadline of July 7 to appeal.
President Donald Trump is threatening a 25% tariff on Apple products unless iPhones are made in the U.S.
“The European Commission is requiring Apple to make a series of additional changes to the App Store,” the company said in a statement. “We disagree with this outcome and plan to appeal.”
Under the changes, developers in the EU will have more ways to promote alternative payment options, including other websites, apps and app stores. They are also no longer required to follow Apple’s specific instructions on the language used in the promotions.
Google has lost its final legal challenge against a European Union penalty for giving its own shopping recommendations an illegal advantage over rivals in search results, ending a long-running antitrust case that came with a whopping fine.
Apple will also offer new fee structures for alternative payments that the company says are cheaper for developers than standard terms.
Under the new terms, the most a developer would pay for the combined acquisition fee and store service fee would be 15%, while majority of developers would be paying closer to 10%, Apple said. That compares with fees amounting to as much as 30% previously.
Apple said it worked continuously with the European Commission as it developed the new plan, including what it says were an ever-evolving set of demands. The company said it believes it complies with the DMA.
In April, both Apple and Meta Platforms Inc. were deemed by the European Commission to have breached strict DMA rules that lay out a series of do’s and don’ts for the world’s largest technology firms. Along with the Apple fine, Meta was slapped with a €200 million penalty for its “pay or consent” ad-free service on Instagram and Facebook.
Apple said it will appeal the EU’s ruling that it shut out music-streaming rivals, including Spotify, on its platforms.
Apple responded fiercely to its penalty at the time, accusing the bloc’s regulators of discriminating against the company and forcing it to give away its technology for free. Just last year, the company was hit with a €1.8 billion EU fine for shutting out music-streaming rivals on the iPhone.
Over recent years the EU has issued costly penalties against firms, including more than $8 billion in fines against Alphabet Inc.’s Google and a separate order for Apple to pay Ireland back taxes of €13 billion.
Stolton and Sisco write for Bloomberg.
