Tech
34 Digital Groups Protest Apple's New EU Policies
By Xavier Roxy
March 2, 2024
Apple's recent changes to its services in the European Union (EU) have been criticized by 34 digital organizations, including Epic Games and Spotify. According to a letter sent to the European Commission, they assert that these alterations mock the new antitrust rules in the bloc.
The group expressed concern over Apple's proposed scheme for compliance with the Digital Markets Act (DMA). The DMA aims to clamp down on anti-competitive practices online within the EU. They argue that Apple’s approach will fail to meet these legal requirements, which could obstruct their ability to deliver the benefits of DMA promptly.
In January, Apple pronounced modifications to how its iOS operating system, Safari browser, and App Store operate across all 27 nations of the EU. It justified this move as an attempt to comply with DMA regulations.
Big tech companies such as Google parent Alphabet, Amazon, Meta, Microsoft, and TikTok owner ByteDance are considered "gatekeepers." Under current legislation, these firms have until March 7th to align their operations with those set out in the DMA. Failure or repeat violations can lead to fines equating to ten or twenty percent, respectively, of global revenue.
A significant change announced by Apple was opening its App Store for rival apps while permitting payment services beyond just Apple Pay on iPhones—a first-time occurrence for them.
However, controversially, it introduced a new “Core Technology Fee." This charges app developers €0.50 ($0.54) per download once they exceed one million downloads via third-party payment systems outside of theirs, like PayPal or Stripe, instead using only the iTunes billing system provided by the company itself, where a fee doesn't apply but takes a larger cut from sales made there.
This has caused widespread discontent among many app developers who assert this is an enormous cost burden, especially considering the volume of downloads some popular apps achieve on a daily basis alone, not mentioning long-term scale business operations. Over time, this would accumulate into substantial sums of money paid out back to the Cupertino-based giant, thus effectively lining their pockets further and reinforcing its gatekeeper status.
In their letter, digital companies stated: "Apple's new terms not only disregard both the spirit and letter of the law but, if left unchanged, make a mockery of the DMA and the considerable efforts by the European Commission and EU institutions to create competitive digital markets."
Several experts have also questioned how much these changes would genuinely expand consumer choice and promote digital competition.
Upon receipt of this complaint, a spokesperson from the European Commission assured that they would thoroughly analyze proposed compliance measures announced by designated gatekeepers once the deadline passed on March 7th. They added that this analysis will be comprehensive rather than based solely on the few announcements made thus far.
"We are looking very carefully at how companies are complying with regulations," said a spokesperson for the commission, adding that once full enforcement powers become available, they won't hesitate to act accordingly against any potential breaches found during the investigation process.