Apple has recently updated its app store policies within the European Union in an attempt to avoid further financial penalties imposed under the EU’s digital competition regulations.
The changes come as a response to a 500 million euro ($585 million) fine levied on Apple by the EU Commission in April for inhibiting app developers from directing users to cheaper alternatives outside of Apple’s App Store.
The big picture: The EU Commission set a 60-day deadline for Apple to adjust its policies to avoid additional, ongoing fines. This deadline expired recently, prompting Apple’s restructuring of the app store policies to comply with the regulations.
- The main change introduced by Apple allows app developers to guide users to more cost-effective deals on digital products and offer alternative payment methods outside of Apple’s platform, including other websites, apps, or even alternative app stores.
- Apple has also unveiled a two-tier fee system to cater to app developers who opt for utilizing alternative payment methods, marking a significant shift in the company’s approach to payments within the ecosystem.
Go deeper: The EU Commission is now tasked with evaluating Apple’s updated business terms to ensure compliance with the Digital Markets Act (DMA), designed to regulate the dominance of tech giants and hold them accountable with steep fines reaching up to 10% of their global annual revenue.
- The DMA mandates that developers must inform customers about lower-cost purchasing options and guide them to these alternatives, a provision aimed at promoting fair competition in the digital marketplace.
Driving the news: Apple’s previous restrictions that prohibited developers from steering users towards external payment channels had faced strong opposition from various companies. For example, music streaming service Spotify removed its in-app payment option to circumvent the 30% commission fees imposed by Apple on digital subscriptions purchased through iOS.
