Apple Competitors demand to be able to set up alternative stores on the App Store in Europe as Legal Squatters
A new reports states that Apple is coming under fire from rivals Meta and Microsoft who say its plans to open up its mobile software to comply with a landmark EU law fail to go far enough, as the iPhone maker faces unprecedented regulatory challenges from Brussels over the coming month.
The Financial Time reports that the growing backlash against Apple comes as it is forced to make some of the biggest changes to its business model in years, following concerns over the dominance of its App Store, which forms a large share of the company’s $85bn-a-year services business.
The changes were offered ahead of the EU’s March 7 deadline for companies to declare how they will adhere to the DMA, which aims to tackle the market power of Big Tech groups.
For those who choose to also build apps in alternative stores, Apple said it would cut the highest amount paid by companies using its App Store to sell digital goods and services from 30 per cent to 17 per cent.
But it will add a series of new charges. These include a “core technology fee” of 50 cents on every download or update of apps with more than 1mn downloads. Apple will also charge an additional 3 per cent fee to app developers that use its payment processor. The 50 cents fee will apply immediately to downloads of alternative app stores.
Critics contend that the changes could lead makers of successful apps being charged far more than they currently are, while removing any incentive for rivals to create alternative app stores.
Phil Spencer, Microsoft’s gaming chief, told the Financial Times that "The initial steps that Apple has put forward are very prohibitive to us actually creating a meaningful alternative to the one store that’s available on the world’s largest gaming platforms, which are mobile phones."
Yet Apple stated that it spent “months in conversation with the European Commission” about the DMA, and that its plan reflects the work of “hundreds of Apple team members who spent tens of thousands of hours” on the solution.
The growing backlash has left the European Commission, the EU’s executive arm, with the dilemma of deciding whether years of work on the new legislation aimed at digital “gatekeepers” has had its desired effect on Apple — and whether it can sanction the company for failing to comply. For more on this, read the full Financial Times report.
It seems insane that competitors just expect Apple to hand over the keys of the kingdom without any compensation whatsoever. The hypocrisy of these tech companies demanding to be on Apple's App store as legal squatters is disconnected from reality.
Agree on your commentary. Apple’s competitors are acting opportunistically at best. IMHO, they see this as a chink in Apple’s customer-experience armor and they’re exploiting it. App publishers clearly have other motives.
I see the regulatory issue as unnecessary. Apple has worn its comparatively closed ecosystem on its sleeve since their inception. Customers understand the tradeoffs and the benefits of Apple’s business model.
While this dynamic of a walled garden, or closed ecosystem might have been enhanced by iOS/iPadOS, customers have entered into this agreement with Apple willingly. Customers also have alternatives.
Many customers obviously choose Apple’s safer user experience over more open alternatives. Therefore, Apple shouldn’t be forced to compromise this experience simply because app publishers disagree with Apple’s business model. The lowest common denominator theory never ends well.
So, there’s been no bait and switch here. No harm to anyone other than app developers bottom line, perhaps. But, then, disgruntled developers can choose to develop for more open alternatives as well.
Better yet, Epic, et al, can certainly choose to create an ecosystem alternative to Apple’s. One that reflects their own business model and customer experience strategy.
Posted by: Matt | February 25, 2024 at 08:14 AM