App Store fees: Apple under fire from all sides

Samuel Buchmann

21/3/2024

Translation: machine translated

Epic announces an alternative app store. At the same time, the developer studio criticises Apple's implementation of EU guidelines and receives support from Microsoft and Meta. Meanwhile, the EU announces that it will scrutinise Apple's new fee structure.

Apple's lawyers currently have a lot to do - the iPhone manufacturer is facing trouble from all directions. The focus is on the app store, its market power and the fee for app and in-app purchases. In the EU, Apple has recently had to authorise alternative app stores on the iPhone. The Californians are implementing this. However, they are charging fees at new locations, which is causing even more criticism - on the one hand from the private sector and on the other from the authorities.

Epic Games is at the forefront of the fight against Apple's levies. The studio behind "Fortnite" announced its own alternative app store in the EU on Wednesday. Not only its own games will be available there, but also apps from other suppliers. The fee for this is 12 per cent of sales - the same as Epic already charges in its stores on Windows and MacOS.

The problem is that in addition to Epic's share, Apple's new "Core Technology Fee" (CTF) is due for apps in alternative stores. Cupertino charges 50 euro cents for every first installation in a year - and this also includes updates. The CTF is therefore de facto an annual 50 cent fee per user.

Within the EU, Apple also collects the CTF in its own app store. In return, the company is reducing the previous App Store fees from 15 to 30 per cent to 10 to 17 per cent. The 10 per cent is intended for apps with sales of less than one million US dollars. For small developer studios, distribution via Epic's alternative app store is therefore not worthwhile, as the fees would be higher there.

Microsoft, Meta, X, Match and EU also dissatisfied

Epic CEO Tim Sweeney called Apple's tactics "malicious" and announced further legal action. He has received support from Microsoft, Meta, X and the dating app group Match. The four tech giants also criticise Apple's high fees and strict restrictions. Apple's behaviour is neither in line with the wording nor the idea of the EU guidelines.

A particular stumbling block: Apple now allows in-app links to external sites where purchases can be made, both in the EU and in the USA. However, suppliers still have to pay between 12 and 27 per cent of the revenue generated in this way to Apple - which makes the option "commercially useless" according to Microsoft and co.

And the EU? It also seems dissatisfied. Margrethe Vestager, Vice President of the responsible regulatory authority told the Reuters news agency that it is already examining whether Apple's new pricing model is unfair. "If the new charging model de facto undermines the benefits of the DMA, we will launch an investigation." <p

Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.