Recently, the European Commission (EC) has been investigating whether Apple has violated the Digital Markets Act (DMA), a legislative act that brought about changes to the iPhone in the EU’s 27 member countries. These changes now allow iPhone users to sideload apps from third-party app stores and use browsers that run on non-WebKit engines. Additionally, developers can offer consumers the option to make in-app payments using third-party platforms instead of being restricted to Apple’s payment system, which generates a commission for the tech giant.
In a press release issued by the EC, it was mentioned that they have informed Apple about their preliminary view that the App Store rules are not compliant with the DMA. The Commission is concerned about how these rules prevent app developers from guiding consumers to alternative channels for offers and content. Furthermore, a new non-compliance procedure has been initiated against Apple regarding their contractual requirements for third-party app developers and app stores, including the Core Technology Fee (CTF).
What is the Core Technology Fee?
– The Core Technology Fee is charged to developers who opt to follow Apple’s new App Store rules in the 27 EU countries.
– Developers can now offer consumers in-app payments through alternative processors in the EU.
– The fee amounts to €0.50 per annual install over one million.
Smaller developers are exempt from paying this fee, as well as nonprofits, educational institutions, government entities with a fee waiver, and those with no revenue business models. Developers earning less than €10 million in global revenue are granted a 3-year free period for paying this fee.
Apart from the Core Technology Fee issue, the EC is also investigating other concerns related to how iPhone users can install apps from alternative sources and whether Apple’s eligibility requirements for developers comply with DMA regulations.
If Apple is found guilty of violating DMA regulations, they could face fines up to 10% of their global revenue. A decision on this matter is expected by March 25th, 2025.
Apple has stated that they have made changes to comply with DMA based on feedback received and are confident in their plan’s compliance with the law. They believe that more than 99% of developers will pay either equal or less in fees under their new business terms. Apple also emphasized their commitment to engage with the European Commission and continue listening to feedback from developers.
