A couple of weeks ago, Apple announced the rules that developers have to follow to make their apps available through third-party app stores and even through simple web downloads. However, these rules were very restrictive – and the European Commission thinks they may not comply with the DMA.
The Commission “has launched investigatory steps relating to Apple’s new fee structure for alternative app stores”. The Commission writes: “Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under Article 6(4) of the DMA.”
The fee structure refers to Apple’s proposed “Core Technology Fee”, which will charge developers €0.50 for each first annual install per year for apps that have received over 1 million downloads from third-party app stores (this also includes downloading updates).
Obviously, this could be devastating to small developers who find that their app exploded in popularity – instead of celebrating, they would be worrying about how to pay Apple’s fee. And they might have to leave an old app without updates as it would incur new fees.
Calculating the monthly Core Technology fee
Apple isn’t the only so-called “gatekeeper” that is in hot water with the Commission and “self-preferencing” is usually the issue. For example, Alphabet is under investigation for promoting its services in search results (i.e. ranking Google Shopping, Google Flights, Google Hotels, etc.) above competing services from other companies. Additionally, Alphabet’s “steering rules” may be preventing developers from sending users to offers outside of the company’s app store free of charge.
Amazon is accused of self-preferencing too – is Amazon pushing its own-branded products above alternatives from competitors? The Commission is looking into it.
Meta’s new “pay or consent” model hasn’t passed the sniff test either. Last year Meta introduced paid ad-free tiers for Facebook and Instagram. “The Commission is concerned that the binary choice imposed by Meta’s “pay or consent” model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers.”
Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft are the six gatekeepers that were designated in September 2023 and had to fully comply with the DMA by March 7. The Commission did grant a 6-month extension for Meta to finish work on Facebook Messenger, work that will allow its users to chat with users of other apps.
Note that these are preliminary investigations, the European Commission has not conclusively determined whether the gatekeepers do or do not comply with the DMA. But if the answer is “not”, then the companies may be hit with fines up to 10% of their annual global revenue (rising to up to 20% for repeat offenders).
