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Brussels officials reportedly say the EU will accept App Store changes — image credit: European Union
A new report says that the European Union is now likely to approve the App Store changes that Apple has made, and so not impose the threatened daily fines for noncompliance.
Apple has recently been objecting to the European Union, most specifically over its being fined $570 million for the alleged anti-competitive practices employed by Apple Music. Specifically, Apple has said that if the EU had not told it to wait, its existing compliance proposals would have prevented the fine.
At the same time as arguing its case against the EU’s Digital Markets Act (DMA), however, Apple has been working to update the App Store and its contracts with developers. Now, according to Reuters, the EU is expected to accept these latest changes.
Citing unnamed sources with reportedly direct knowledge of the matter, the publication says that Apple’s moves are likely to stave off the daily fines that could have followed. The sources say that the EU is expected to formally approve the changes in the next few weeks, but timings may change — and the decision is not guaranteed.
“All options remain on the table,” said an EU spokesperson. “We are still assessing Apple’s proposed changes.”
What Apple has done
At the very end of the 60 days the EU gave Apple, the company announced App Store changes regarding developer fees and the perennial issue of anti-steering.
Under the new system, Apple drops its Core Technology Fee (CTE), and replaces it with a series of other fees. The CTE had developers pay Apple 27% of their App Store earnings to cover the company’s hosting and distribution costs.
Now instead, Apple is proposing three other fees:
- Acquisition Fee
- Store Services Fee
- Core Technology Fee or Commission
The Acquisition Fee is 2% on sales of digital goods and services, for up to six months from a user’s initial download. The Store Services Fee pays for the platform, and varies between 5% and 13%, with discounts for small businesses and others.
Then the last fee is either a new Core Technology Fee, or a Core Technology Commission, depending on which contract terms a developer chooses. The former costs half a Euro per transaction, while the latter is a 5% fee for developers on Apple’s standard terms.
The issue with the EU is that it could have imposed very large fines on Apple once the 60-day period for compliance expired. It could have amounted to around $58 million every day.
However, those 60 days expired on June 26 and it was reported that the EU would not fine Apple right away. It hasn’t done so, and it’s possible that this is because of the EU’s ongoing trade negotiations with the US.
