Fortnite returns to iOS for iPhone users in the EU. However, the game’s creator, along with other tech companies and app developers, are criticizing Apple for the policy changes based on the EU law that allowed Fortnite to return to the top spot.
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Spotify CEO Daniel Elk called Apple’s announced App Store policy changes the company’s “new minimum.”
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Xbox President Sarah Bond He said a “step in the wrong direction” policy.
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And Epic Games CEO Tim Sweeney opinions to Apple’s new rules? “Hot garbage,” “a new horror show,” and “an insidious new instance of malicious compliance.”
What’s going on here? How could regulation aimed at preventing companies like Apple from instituting anti-competitive practices provoke such responses from industry leaders?
Here’s what Apple does so controversially
Like Mashable earlier reporteda new EU law called the Digital Markets Act (DMA) basically forced Apple to allow alternative app markets to distribute iPhone apps.
Fortnite creator Epic Games, for example, has been embroiled in a years-long legal battle with Apple over the issue. The gaming giant’s decision to allow players to purchase in-game currency directly from the company, avoiding Apple’s fees, resulted in the launch of Fortnite from the official App Store in 2020. Fortnite players have not been able to play the game through official channels on their iPhone since.
Regulators in the European Union created the DMA to deal with cases like this by requiring companies like Apple to allow alternative markets to distribute apps on their devices and platforms.
This should be a win for both consumers and developers. However, app developers believe that Apple’s new policy, created directly in response to DMA, is designed to continue to hold out against anyone who chooses to bypass Apple and the App Store through these alternatives.
New fee structure from Apple
Apple gives developers a choice, if you can really call it that.
App developers can choose to stay with the status quo and distribute their apps through the App Store under current terms, under which Apple takes as much as a 30 percent cut of revenue. If developers accept this model, everything stays the same for those developers.
However, if developers want to take advantage of the DMA that forces Apple to open up to alternative markets, things could change drastically for them…and not all for the better.
Perhaps the most significant change is the introduction of a Core Technology Fee (CTF) for each app issued by a developer who accepts these new terms. Basically, Apple is charging developers for user installs. Once the app gets more than a million installs, Apple will start charging the developer a 0.50 euro annual fee for the first install per user. This fee allows the user to download the app as many times as they want on their devices and install as many updates as needed in a 12-month period. At the end of that year, Apple would charge another developer an install fee from that user, if the app has more than a million total installs.
The CTF applies to all apps, free or paid, regardless of whether they are distributed through the Apple App Store or an alternative marketplace. That is, unless the developer decided to stick with the current status quo agreement with Apple.
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Nikita Bier, founder of the technology behind many popular free social media apps like tbh and Gas, highlighted that under this new fee structure, apps could potentially earn less than they would under the current App Store revenue sharing agreement. In fact, some developers may end up owing Apple more money than they make.
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In addition, alternative markets will have a barrier to entry under Apple’s new terms. In order to launch such a platform that will compete with the App Store, Apple is demanding these markets to provide the iPhone maker with “a letter of credit from an A-rated financial institution in the amount of €1,000,000 to establish adequate financial resources to guarantee support for your developers and users.”
Kick back
Negative attention to Apple for its reaction to DMA was unanimous among developers.
As mentioned earlier, Xbox and Epic Games criticized Apple’s new terms. As well as famous technology founders such as Bier and Ruby on Rails creator David Heinemeier Hansson.
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Jacob Eiting, CEO of mobile analytics platform RevenueCat, He said in a post that these new rules somehow led to a situation where, for the first time, developers could owe Apple more than they were making.
But perhaps the most interesting statement came from ProtonMail founder and CEO Andy Yen.
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ProtonMail is a popular email service that long advocated for DMA before it even became law. In a statement, Yen made it clear that Apple is “trying to profit from the DMA” and actually called on the EU to take action based on Apple’s policy changes.
“The European Commission cannot let this blatant breach of the rules go by,” he said.
But will they do something? It sure seems like it would.
According to the EU Internal Market Commissioner Thierry Breton, who I may know the most to readers taking Elon Musk during the last year, a overview of Apple’s suggestions it will be done at the beginning of March. And the EU will also evaluate third-party feedback.
“If the proposed solutions are not good enough, we will not hesitate to take harsh measures,” Breton said Reuters in the statement.