Meta and Microsoft aren’t about to just let Apple get away with “malicious compliance.”
According to a new report from Financial Times, the two biggest critics of Apple’s new App Store rules are officially lobbying the EU to reject the iPhone maker’s tricky new App Store terms. Meta and Microsoft hope the EU will reject Apple’s proposal and force the company to go back to the drawing board to draw up new policies that comply with the Digital Markets Act (DMA).
The DMA is a new EU law created to open up big technology and encourage competition in the market. However, since Apple announced updates to its DMA-inspired rules last month, many developers have criticized the Cupertino-based tech giant for bending the law to do just the opposite.
“The initial steps [to comply with the DMA] that Apple has put forward are way too high for us, actually creating a meaningful alternative to the one store available on the world’s biggest gaming platforms, which are mobile phones,” Microsoft Gaming CEO Phil Spencer said in a statement to the Financial Times. “So we will continue to work with regulators to open it up.”
Here’s what Apple did
Perhaps the best example of Apple’s problematic DMA “compliance”—and the issue at the heart of Meta and Microsoft’s complaints—is the company’s changes to the App Store.
According to the DMA, Apple is no longer allowed to monopolize the iOS app market and must allow alternative markets on iOS for developers to distribute their apps. This means that in the EU, developers will no longer be subject to Apple’s content rules or revenue sharing model for in-app purchases.
In response to the new regulation, Apple updated its App Store rules to allow for alternative marketplaces, but they made it potentially expensive for developers to distribute apps through them.
The most significant change for developers who want to release apps without the Apple Store is the Core Technology Fee (CTF). Under Apple new scheme, any developer who accepts the updated terms should pay 0.50 euros to Apple, per first installation per year, for each user, for each installation exceeding one million. The fee will be charged regardless of whether the application is paid or free. These new rules, for the first time, open up the possibility that an app developer owes Apple more money than they earned from the app.
“I don’t think the Apple thing will make any difference to us because I think I would be very surprised in the way they implemented it if any developer decided to go to the alternative app stores that they have,” Meta CEO Mark Zuckerberg he said in an earnings call earlier this month. “They’ve made it so difficult and, I think, so contrary to the intent of what the EU regulation was that I think it’s going to be very difficult for anyone, including us, to really get serious about what they’re doing there.”
In addition to Meta and Microsoft, other companies such as Spotify and Fortnite the creator of Epic Games took down Apple. Especially Epic Games CEO Tim Sweeney defendant Apple for “malicious compliance,” a term that has since become common terminology for Apple’s behavior.
EU regulators review Apple’s ‘compliance’
The backlash against changes inspired by Apple’s DMA is already strong enough that the EU is already taking steps to review them.
Apple’s reaction to the DMA has the European Commission questioning whether the years it took to draft the law had the desired results, according to Financial Times. One independent analyst told the outlet that it basically seemed like Apple was seeing what it could get away with with the new law.
The EU could potentially fine Apple for non-compliance when the law comes into force if it finds that these rule updates do not embody the spirit of the DMA. Or the DMA could reject Apple’s App Store proposal entirely and force the company to come up with a new DMA-compliant policy.
Whatever the European Commission decides will be crucial in determining whether the DMA actually opens up the market – or whether it allows big tech companies to continue to monopolize entire markets.