A Apple will have to allow the sideloading of apps, games and alternative stores on iPhone and iPad in European Union (HUH), in compliance with the Digital Markets Law (DMA), recently approved. What no one expected was that Apple would find a way to continue taking its share, even from external facilities, in the form of new fees. Needless to say, everyone, including big and small developers, and some heavyweights (and rivals) like Meta, Microsoft, Epic Games, Spotify and others cursed a lot on Twitter X, but the truth is that Apple can and will charge, because the DMA says nothing against it.
Apple will charge 17% to 10% commission, plus €0.50 per installation after 1 million downloads, even for apps installed outside the App Store (Credit: Ronaldo Gogoni/Meio Bit) When the DMA was approved, it classified certain companies and apps as gatekeepers, in that they have a market capitalization of more than €75 billion (~R$401.1 billion, as of 02/02/2024), or with an annual gross revenue of more than 7.6 € billion (~R$40.6 billion), and provide at least one category of internet service, including connection, search, streaming, storage, etc. Apple, Google, Meta, Amazon, Microsoft, and ByteDance/TikTok were all included, in which they must follow very strict rules: Privileging products and services on your own hardware and solutions is prohibited; Pre-installed apps must allow the user to uninstall them, without exceptions; Instant messengers must all talk to each other, and are prohibited from limiting resources to specific platforms and hardware; External companies must have access to all data generated in the services provided by gatekeepers; Data from European users cannot be used for targeted display of advertisements unless they expressly authorize it. Apple had three products marked as gatekeepers, being iOS, Safari and App Store; Apple cannot force users to depend on a single solution, therefore, it is obliged by law to allow manual installation, sideloading, of any compatible app or game, which includes alternative stores. More than fast, Epic Games announced the return of Fortnite to the iPhone in Europe, accompanied by the launch of its store for other apps and mobile games, via alternative means. However, the joy of devs and other companies and studios was short-lived when Apple announced a series of measures and rules for the implementation of sideloading in Europe. First, even if new apps and games are made available outside the App Store, they are all still required to be submitted for evaluation, and approval, by Apple. New stores can only be installed if the user gives permission to do so, and all standard quality and safety protocols must continue to be followed, to keep the User Experience™️ pristine. In this way, apps that could undermine user safety (the way Cupertino found to skewer Google) and those that do not meet the company's quality criteria are prevented from operating. But the biggest source of criticism comes from the fact that, yes, Apple will continue to take its cut, even from software that is installed from the outside. Developers can choose to distribute their applications and games for a lower commission, no matter where, between 17% and 10%, depending on the category; There will also be a 3% processing fee on transactions if these apps use the App Store's integrated payments system to process their sales, which is optional but recommended by Apple, not just because it suits you, but also for extra security . Looking at it this way, the conditions still seem better than the 30% rate on everything in the App Store, but here comes the catch: popular apps and games, which surpass the 1 million download mark, whether inside or outside the store official (and Apple can verify this), they will have to pay an additional fee, called Tax on Essential Technologies (Core Technology Fee, or CTF), in the amount of €0.50 (~R$2.67) per installation, every year. Ah, updates also count as downloads.
Since Apple hates sideloading, the chances were zero that it would not try to make money when forced to implement it (Credit: Reproduction/Web Summit) Depending on the popularity of an application, the total commission owed to Apple could far exceed the standard 30% for internal distribution, generating heavy values for the big players, and priceless figures for smaller studios and developers. Ultimately, almost all distributors will prefer to continue offering their solutions through the App Store, which does not accept third-party stores, and this will not change. Needless to say, Tim Sweeney and Daniel Ek, CEOs of Epic Games and Spotify respectively, and opponents of Apple, HATED the new rules, accusing the Cupertino giant of distorting the laws in their favor; such measures would make the relaunch of Fortnite for iOS in Europe, and the opening of the mobile version of the Epic Games Store focused on iPhone and iPad games, financially unfeasible, given the popularity of both and the consequent huge commission that both would generate for Apple, which Sweeney do not want to pay under any circumstances. Ek, in turn, has always been at odds with Apple due to the commission on Spotify subscriptions, and it is in the company's interest to use sideloading to avoid them, which will no longer be the case; in fact, the debt would become even greater. Regarding the sideloading fee, the executive declared that Apple's attitude is “extortion”, and that its entire commitment to compliance with European laws is “a farce”. Epic and Spotify weren't the only ones to throw apples at apples. Sarah Bond, president of the Xbox division, he said that Apple's decision to charge for alternative distribution is “a step in the wrong direction” (Microsoft is also preparing to launch an alternative mobile games store), while Mark Zuckerberg, CEO of Meta, explained to investors that the rules are ” so onerous”, that no developer with their head on straight will choose to offer their apps outside the App Store, and thus, the iOS versions of Facebook, Instagram, WhatsApp and co. will not be offered via sideloading. While staying on the App Store may be the sensible thing to do for most developers, those with intentions of launching alternative stores will have no choice but to turn to alternative distribution, and pay Apple commission anyway.
DMA does not prohibit Apple from charging
As much as Sweeney, EK, Bond, Zuck and others complain, Apple is not violating the DMA by charging for sideloading. First, the most valuable company in the world has experts in the legal field, especially at this time, when European legislation for digital markets and services is changing, and they guide the company on what it can and cannot do. Therefore, this strategy was not implemented anyway. Second, Article #6 of the Digital Markets Law (careful, PDF), which discusses how gatekeeping companies and services must act in the 27 EU member countries, attests that the rules for competition must be “fair”, but It doesn't mention anything at all about charging, that is, it doesn't prohibit it, but it doesn't regularize it either. Under this understanding, Apple can impose commissions even on software distributed outside, and if developers do not agree to the conditions, they will have the option of remaining within the App Store. Ultimately, there's the alternative that Tim Cook and other company executives, like SVP of Software Engineering Craig Federighi, often give to those who refuse to dance to the tune: Android.
The truth is one: Tim Cook and Apple will continue to make a lot of money (Credit: Reproduction/The Wrap) The complete silence of EU legislators, especially Commissioner for the Internal Market Thierry Breton, who is usually very vocal in the face of defense and implementation of the DMA and the Digital Services Act (DSA), even outside the Old World, point to the possibility that they do not consider Apple's actions to be in violation of the DMA; Instead, Cupertino is offering options to developers, between the full App Store commission, or the fragmented one eligible for externally distributed apps. Of course, European developers can complain, these are the ones most likely to be heard by members of the European Commission (Elecs, Netguru, Ubisoft, CD Projekt Red, etc.), but until then, Apple will work as it should who knows how to make money, and most importantly, without violating the Law. For those who didn't like it, the Cebolinha meme remains. Source: TechCrunch, 9to5Mac