Developers in Europe Protest Apple’s App Store Control, Call for Government Intervention
A battle for control is brewing within the iPhones of Europe. Apple recently introduced new rules that were intended to loosen its grip on the App Store, but local developers are far from satisfied. They argue that these new regulations only further solidify Apple’s dominance over their businesses. In response, they have launched a rare open revolt and are now pressuring lawmakers to intervene.
The developers have not minced their words when describing Apple’s new business terms. They have called them “abusive,” “extortionate,” and “ludicrously punitive.” Matthias Pfau, CEO and co-founder of Tuta, an encrypted email provider, compares Apple to the Mafia, claiming that the tech giant holds app providers hostage and demands a ransom. According to Pfau, anyone who wants to provide an iOS app must pay a fee to Apple, with no way around it.
Pfau shares his own experience with Tuta, stating that for years, Apple has rejected app updates if they contain links to the company’s website. Additionally, like all iOS apps, Tuta is unable to process in-app payments directly from customers. Instead, Apple acts as an intermediary and charges a fee. Pfau had hoped that the App Store reforms mandated by the EU’s Digital Markets Act (DMA) would alleviate some of these restrictions. However, he is disappointed with the new terms offered by Apple, which he believes demonstrate the company’s abuse of its market dominance. He goes as far as to compare Apple’s behavior to that of a dictator.
Under the DMA, Apple was designated a “gatekeeper” due to the EU’s recognition of the App Store as a crucial gateway between businesses and consumers. To avoid substantial fines that could reach up to 20 percent of their global revenue, Apple announced new rules in late January. These rules technically allow users to download apps from alternative app stores and enable developers to use their own payment systems, bypassing Apple’s commission.
However, in order to access these new features, developers must agree to new business terms. Pfau argues that these terms include restrictions that discourage developers from deviating from the status quo. If Tuta were to take advantage of the new system, iPhones would display warning messages, known as “scare screens,” alerting users to potential security risks associated with using payment systems not managed by Apple. Based on Tuta’s testing, Pfau estimates that these warnings would dissuade 50 percent of users from proceeding with their purchase.
Furthermore, while the new terms allow Pfau to make Tuta available in an alternative app store, they also subject the company to a “core technology fee” for every download or update exceeding 1 million times within a year. Pfau acknowledges that Tuta, with over 100,000 paying subscribers, may not have to pay this fee in the first year. However, as the company continues to grow, he believes they will inevitably have to pay it within the next few years.
For Spotify, a Swedish music streaming service, the download fee poses an immediate problem if the company were to accept Apple’s new business terms. Spotify CEO Daniel Ek expressed concern about the potential increase in customer acquisition costs due to this new tax on downloads and updates. Ek believes that Apple’s actions represent a new low, even for them, and claims that no sane developer would choose any of the new terms. As a result, Spotify, along with other apps, feels compelled to stick with their current agreement, which means continuing to pay commission to Apple and exclusively listing their iOS app on the App Store. However, this decision prevents them from generating revenue from users purchasing products such as audiobooks through their app.
Apple maintains that its changes are compliant with the DMA and necessary to protect its EU users’ devices from security risks introduced by the new law. The company emphasizes that its approach to the Digital Markets Act was guided by two goals: complying with the law and reducing potential risks for EU users. According to Apple spokesperson Julien Trosdorf, the company created safeguards to protect EU users and address new threats, including malware, scams, and challenges to app functionality on Apple’s platforms.
While individual app developers may not possess significant power to influence Apple’s decisions, they hope that their criticism will prompt the European Commission, a branch of the EU’s government, to take action. After the March 7 deadline, officials are expected to evaluate Apple’s proposals and the market’s response. Sebastiano Toffaletti, secretary general of the European DIGITAL SME Alliance, an industry group, urges the European Commission to reject Apple’s proposal and consider imposing fines if further improvements are not made.
Andy Yen, CEO of Swiss email and cloud service Proton, takes a less diplomatic stance. He describes Apple’s proposed business terms as an insult and a slap in the face to the European Commission. The discontent among developers is palpable, and they are determined to
