May 27, 2024

Apple withdraws from the App Store battle in Europe – March 12, 2024 at 7:31 p.m

Apple on Tuesday made a key concession in its battle for dominance of its App Store on iPhones and other devices in Europe, saying developers will be free to distribute their apps directly to consumers.

Apple announced the changes to comply with the European Union's Digital Markets Act (DMA), which came into force last week. The changes could impact the high profit margins and steady stream of income that Apple relies on from its App Store, where the company charges developers fees of up to 30%.

The changes, which only affect the European Union, come amid ongoing criticism from competitors that Apple's compliance efforts are insufficient.

Starting this spring, developers operating in Europe will be able to distribute apps to EU customers directly through their own websites, rather than through the App Store.

Developers still must meet Apple's terms and conditions and be certified developers. Apple also introduced a “core technology fee” of 50 cents per user account per year, even if developers choose not to use the App Store or Apple's payment system.

The DMA aims to rein in Apple, Amazon, TikTok owner ByteDance, Meta Platforms, Alphabet's Google and Microsoft, creating a level playing field for smaller rivals and ultimately more competition for the Europeans.

“To reflect changes to the DMAs, in iOS 17.4 and later, users in the European Union will be able to install apps from alternative app marketplaces. Users can download an app from an alternative marketplace from the marketplace developer's website,” Apple said on its website. . IOS refers to the software platform that Apple's iPhones and iPads run on.

The opening of Apple's European ecosystem, which the company has long guarded as a highly profitable “walled garden,” comes at a sensitive time for the tech giant.

The iPhone manufacturer is suffering from shrinking sales and weak demand for its smartphones in China. In January, Microsoft dethroned Apple as the world's most valuable company. Investors believe Apple is falling behind its big tech rivals in their race to dominate artificial intelligence technology.

Apple shares rose 0.6% Tuesday afternoon, cutting its 2024 losses to 10%.

Among the changes announced Tuesday is that developers will now be able to set up alternative app marketplaces to offer a catalog consisting exclusively of a developer's own apps.

Developers can decide how to design promotions, discounts, and other in-app offers when they ask users to complete a transaction on their website instead of using Apple's template.

Under pressure from regulators and the DMA, Apple last week took a step back in its dispute with Epic Games, allowing the company to introduce its own game store on iPhones and iPads in Europe. DMA violations can result in companies being fined up to 10% of their global turnover.

Apple also said it would appeal a €1.84 billion ($2 billion) antitrust fine the European Union imposed on the company last week for restricting competition with Spotify and other music streaming rivals in the App Store.