Paris, France – Apple recently announced significant changes to its App Store in response to the European Union’s Digital Markets Act (DMA) regulations. The company disclosed that the EU market represents 7% of its global App Store revenues. Apple’s chief financial officer Luca Maestri stated that the financial impact of these changes will depend on the decisions made by developers in adopting different systems.
Under the DMA, Apple is required to allow alternative app stores and enable developers to use third-party payment processors. Additionally, the company intends to impose a core tech fee on apps that exceed one million annual downloads across various app stores. Despite these changes, Apple reported a record quarter for App Store revenues, with overall services revenue reaching $23.1 billion, marking an 11% increase year-on-year.
In response to criticism, Apple defended the App Store and its commission ecosystem, emphasizing its commitment to privacy and security. However, CEO Tim Cook acknowledged that the company may fall short in providing the best user experience due to these regulatory changes.
The company also had to open up the browser ecosystem in the EU by allowing other browsers to use their own engines instead of WebKit. Furthermore, Apple is expanding support for in-app purchase systems to include mini-games, mini-apps, plug-ins, and chatbots. This move allows streaming game stores for cloud gaming services to be distributed through the App Store globally.
Industry reactions to Apple’s changes have been strong, with Spotify referring to Apple’s DMA plan as “extortion” and Epic Games CEO criticizing it as “malicious compliance” full of “junk fees.” Additionally, Meta CEO Mark Zuckerberg expressed doubt over developers opting into Apple’s DMA rules, describing them as “onerous.”
The Coalition for App Fairness, an industry group with members like Epic Games and Spotify, characterized Apple’s changes as a “non-compliance plan,” stating that the company has no intention to comply with the DMA.
Apple’s efforts to adapt to the DMA regulations reflect the challenges tech companies face in navigating regulatory environments while balancing their business interests and relationships with developers. As the situation continues to evolve, the impact of these changes on Apple’s global app store revenues and its relationship with stakeholders remains to be seen.