Since the App Store launched in 2008, it has operated virtually identically in 175 countries.
The company’s critical economic results are a miracle. App Store sales topped $1 trillion, the popularity of the apps helped create more than seven million jobs, and Apple generated billions of dollars in net profits.
But almost 16 years after the opening of the Apple store, the gradual increase in power over it, many scientists in different countries behind bachelor companies are making concessions that previously seemed impossible.
The EU forced Apple to change its approach to app distribution
On March 8, the European Union began to act Digital Markets Act (DMA)which was passed in 2022 and hit Apple the hardest.
This law obliges Apple to open access to other stores to applications on iOS and prohibit alternative payment systems in applications.
Apple will comply with this law, although it is categorically against it. The company states that its Control of the App Store is critical to the security and quality of the apps transferred..
An Apple spokesperson told The New York Times that the company has spent months debating various panels of the law and has held meetings with developers discussing plans for an unfettered App Store while minimizing the risks of competitive software and fraud.
Apple engineers have spent thousands of hours creating more than 600 new software tools for developers to work with DMA.
These changes are expected to reduce sales through the App Store and lead to lower profits. The App Store generated $24.12 billion in revenue last year, according to Bernstein Research.
Other countries are planning to pass similar laws, and Russia too.
Due to the new requirements, Apple had to allow alternative payment systems in the US and South Korea.
Popular colors are discussed in the UK, Japan and Australia.
The Russian Ministry of Digital Development previously stated that they were considering a financial balance that would oblige Apple to open access to applications from neighboring stores. This initiative does not seem hopeless, because Apple continues to implement decisions of Russian courts and pay fines.
The App Store has a 30% commission that all developers hate
When the App Store first came out, Steve Jobs said the fee was profitable because it allowed all developers to distribute apps to the iPhone.
But over the years, the application market has changed, and Apple’s conditions have remained the same. Users don’t notice fees because they keep investment returns.. For example, when you buy an iOS subscription or an application for 100 rubles, the provider receives 70 rubles, and Apple takes 30 rubles.
Large developers did not correct this practice. For example, Netflix has disabled the ability to purchase a subscription on iOS. Other developers are raising prices on iOS to pass the fees on to users.
As a result, there are cases when a subscription on iOS costs, for example, 130 rubles, and on Android and the company’s website – 100 rubles.
Some developers believe that both partners are unacceptable because Apple should change the terms.
In 2019 Spotify files a complaint against Apple in Europe, accusing it of anti-competitive substitution, as it bans music streaming services that teach users alternative ways to pay for their subscriptions. A year later, Epic Games, the creator of Fortnite, sued Apple’s system in the US, accusing it of violating antitrust laws by forcing developers to use its payment system.
In 2021, a US court ordered Apple to ban the use of payment system elements in iOS applications. Apple complied with this requirement, but with one condition: developers must pay a 27% commission.
Here’s how Apple itself thought about this decision:
All App Store developers, including those who include call-to-action buttons or links in their apps, use Apple’s proprietary technologies and intellectual property tools and gain access to its user base. This includes Apple’s investments in developer tools, SDKs and APIs, as well as updates to the platform itself. In addition, Apple provides a safe and secure experience on its platform where users and developers can make purchases freely.
Apple
Formally, Apple complied with the requirement, but ideologically interpreted the decision in its use. The court also held Apple’s position; Epic Games planned to appeal this decision.
Obviously this is window dressing. Does this satisfy the court? Maybe.
Colin Kass, antitrust lawyer
Apple implemented a similar scheme in South Korea. The Ministry of Communications and Information and Communication Technologies ordered Apple to cancel the commission, threatening a fine of $15.4 million. Apple has stated that your changes comply with the law.
The European Union fined Apple for the first time, and immediately for €1.8 billion.
Spotify’s complaint led to more serious consequences. In addition to requiring Apple to allow music streaming services and other subscription purchasing methods, it was fined €1.84 billion for abusing its reasonable offer.
Apple responded by appealing the decision and also issued an unusually harsh press release discussing why it disagreed with the commission’s findings.
Today, Spotify boasts a 56 percent share of the global music streaming market, more than doubling its closest competitor’s share, and pays Apple nothing for the services that have helped make it one of the most recognizable brands in the world. Much of their success comes from the App Storeand all the tools and technologies that Spotify uses to create, update and distribute its applications to Apple users around the world.
Despite the App Store’s success in implementing it, Spotify pays nothing to Apple. That’s because Spotify, like many App Store developers, made a choice. Instead of selling subscriptions to their apps, they sell them on their website. And Apple doesn’t charge a commission on these purchases.
Spotify wants to change its rules by setting subscription prices in its app without using the App Store payment system. They want to use Apple’s tools and technologies, distribute them in the App Store, benefit from the protection we have won from users, and not pay Apple anything for it.
In short, Spotify wants more.
Apple
Apple also points out that Spotify has long been cooperating with the commission to change the working conditions in the App Store.
In 2015, Spotify began cooperating with the commission’s investigations, without noticing anything in common with reality. They argued that the digital music market had stalled and that Apple remained in control. Unfortunately for them, Spotify continued to grow and, thanks to the App Store, eclipsed every other digital music company in the world.
Over the next eight years and more than 65 meetings, Spotify’s European Commission tried three different things. Each time they narrowed the scope of their claims, but each version had a couple of common features:
▪️ No evidence of harm to consumers: European consumers have more choice than ever in an exponentially growing digital music market. In just a few years, it has grown from 25 million subscribers to almost 160 million, with more than eight 300 million active listeners, with Spotify being the biggest beneficiary.
▪️ Any evidence of anti-competitive behavior: Years of investigation have yet to produce a coherent theory to explain how Apple was thwarting eight competitors in a market that is so clearly thriving.
The European Commission is proposing this solution shortly before granting force to the new Digital Market Act (DMA). Apple expects to adjust the DMA requirements within a few days, and our plans include changes to the rules that are being challenged in this case. Obviously, this decision is not based on existing antitrust laws. This is an attempt by the opinion to enforce the DMA before the DMA becomes law.
The reality is that European users have more choice than ever. Ironically, today’s a decision in the name of competition is only a serious attitude towards the success of the companywhich is the runaway leader in the digital music market.
Apple
Spotify naturally agreed with the court’s decision. However, she is waiting to see how Apple will respond to demands for decisions, because “Apple regularly ignores laws and decisions in other markets.”
The App Store has become a collection of different stores
The previous App Store rules were the same for all countries and for all developers.
Now the App Store looks the same everywhere, but its parts work in different countries. Meanwhile, Apple often does not want these achievements.
Practice shows that even such a large company as Apple can be obliged to change its operating rules. And there is no doubt that lawmakers in other countries, especially those where Apple has a long history and success, will influence the App Store.
Source: Iphones RU
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
