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Tag: DMA

  • Apple’s EU App Store: New Fees, More Complexity

    Apple’s EU App Store: New Fees, More Complexity

    Apple Updates EU App Store Rules with Fee Changes

    Apple recently updated the rules for its EU App Store, introducing a more intricate system of fees. These changes impact developers operating within the European Union and aim to comply with the Digital Markets Act (DMA).

    Details of the New Fee Structure

    The updated fee structure involves multiple components that developers need to understand:

    • Core Technology Fee (CTF): A per-install fee for apps exceeding a certain threshold.
    • Reduced Commission: A lower commission rate for developers who opt into the new terms.
    • Payment Processing Fee: Charges for using Apple’s payment processing system.

    Impact on Developers

    Apple’s updated EU App Store rules introduce the Core Technology Commission (CTC), replacing the old Core Technology Fee (CTF) developer.apple.com Under the CTF, developers paid €0.50 for each “first annual install” over 1 million downloads wnhub.io. Soon, the CTC will add a 5% fee on external-purchase transactions, while standard in‑store service fees remain 5% or 13%, depending on the developer tier techcrunch.com

    🚩 Why Developers Are Wary

    Smaller Developers Pay More

    Currently, small teams enjoy a free three‑year on-ramp (if revenue stays below €10M) webriq.com However, after that, every “first install” beyond 1 million incurs CTF/CTC fees. This could squeeze free and freemium app makers who depend on volume rather than purchases.

    High‑Install Apps See Bigger Bills

    Some fear that bot farms or heavy install spikes could inflate CTF costs dramatically tobin.yale.eduOne Reddit user warned:

    “Imagine being the target of a bot farm … now it’s not just bad reviews … but the cost of all the installs.” reddit.com

    Business Model Impact

    Freemium and free app developers generally have low revenue per install, so volume-based fees hit them hardest medium.com. They’ll pay both existing App Store commissions and these new install‑based charges.

    🧭 Pros & Cons: At a Glance

    ✅ Pros⚠️ Cons
    Lower service fees (5%) for some tiersCTF/CTC adds substantial costs for high-install apps
    Encourages alternative payment modelsSmaller devs may exceed install thresholds unintentionally
    Aligns with EU’s Digital Markets ActComplexity of tiered fees complicates budgeting

    Compliance with the Digital Markets Act (DMA)

    Apple states these changes are necessary to comply with the EU’s DMA, which aims to promote competition and prevent gatekeeping by large tech companies. The DMA mandates that app stores allow alternative payment systems and permit developers to communicate directly with users.

    Looking Ahead

    Developers are now evaluating the impact of these changes on their businesses and considering whether to adopt the new terms. The situation continues to evolve as developers and regulators analyze the implications of Apple’s updated App Store rules in the EU.

  • Apple’s EU Payment Warnings:

    Apple’s EU Payment Warnings:

    Viral Outrage Over Apple’s EU Payment Warnings: The Key Fact

    Apple’s recent implementation of warning messages on EU App Store listings for apps utilizing third-party payment systems has ignited online debate. These warnings, featuring a red exclamation mark, inform users that the app does not use Apple’s “private and secure payment system” and caution about potential limitations, such as the absence of purchase history, Family Sharing, or unified subscription management .PaymentExpert.com

    Understanding the Context

    The Digital Markets Act (DMA) mandates that dominant tech platforms like Apple allow developers to direct users to alternative payment options outside the App Store. In response, Apple introduced these warning messages to inform users about the potential risks associated with external payment systems, emphasizing concerns over security and privacy .The National Law Review

    Compliance or Deterrence?

    Apple Blocks Fortnite: Epic Games’ Legal BattleWhile Apple asserts that these warnings are part of its compliance efforts with the DMA, critics argue that the language and design of the messages may dissuade users from opting for third-party payment methods. The European Commission has previously fined Apple €500 million for breaching the DMA‘s anti-steering obligations, highlighting concerns over Apple’s restrictions that hinder developers from informing users about alternative purchasing options .The National Law Review

    The Broader Implications

    This situation underscores the tension between regulatory compliance and user experience. While Apple aims to maintain its security standards, the implementation of these warnings raises questions about the balance between informing users and potentially influencing their choices. As the DMA continues to shape the digital landscape, the effectiveness and fairness of such measures will likely remain under scrutiny.

    For a more detailed analysis, you can read the full article on TechCrunch: Viral outrage over Apple’s EU payment warnings misses key fact.

    Understanding the Digital Markets Act (DMA)

    The Digital Markets Act (DMA) is a European Union law designed to ensure fair competition in digital markets. It targets large online platforms, termed “gatekeepers,” to prevent anti-competitive practices. Apple, being a significant player, falls under this regulation.

    Apple’s Compliance Efforts

    To comply with the DMA, Apple has made several changes, including allowing developers to offer alternative payment options within their apps. This means users in the EU might encounter warnings when using payment methods outside of Apple’s ecosystem. This move aims to provide users with more choices and potentially lower costs.

    The Misunderstood Warnings

    The warnings users are seeing are a direct result of Apple adhering to the DMA. When a user chooses to pay through an alternative payment system, Apple wants to ensure they are aware of the potential risks. These risks include:

    • Potential security vulnerabilities.
    • Lack of Apple’s standard customer support.
    • Possible inconsistencies in the user experience.

    These warnings aren’t meant to scare users but to inform them about the implications of using non-Apple payment methods.

    Why the Outrage Misses the Point

    Much of the online criticism focuses on the inconvenience of these warnings. Critics argue that Apple is making it difficult for users to utilize alternative payment methods. However, it’s essential to recognize that Apple is attempting to balance compliance with the DMA and user safety.

    The Bigger Picture: Competition and User Choice

    Ultimately, the DMA aims to foster a more competitive digital landscape. By allowing alternative payment options, the EU hopes to reduce the dominance of major platforms like Apple and give smaller companies a fairer chance. While the warnings may be an inconvenience, they are a necessary part of this transition. The goal is to empower users with more choices and control over their digital experiences. Consider exploring the details of the DMA on the European Commission’s website to understand the full scope of these changes.