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Posts tagged with "DMA"

European Commission Preliminarily Finds That Apple Has Violated the Digital Markets Act

Today, the European Commission informed Apple that based on its preliminary investigation it has determined that the company is in violation of the Digital Markets Act. The EC has also opened a separate non-compliance procedure against Apple over the Core Technology Fee and other changes instituted earlier this year as part of its response to the DMA.

In particular, the EC’s preliminary findings take issue with Apple’s response to the DMA’s anti-steering provisions:

Apple currently has three sets of business terms governing its relationship with app developers, including the App Store’s steering rules. The Commission preliminarily finds that:

  • None of these business terms allow developers to freely steer their customers. For example, developers cannot provide pricing information within the app or communicate in any other way with their customers to promote offers available on alternative distribution channels.
  • Under most of the business terms available to app developers, Apple allows steering only through “link-outs”, i.e., app developers can include a link in their app that redirects the customer to a web page where the customer can conclude a contract. The link-out process is subject to several restrictions imposed by Apple that prevent app developers from communicating, promoting offers and concluding contracts through the distribution channel of their choice.
  • Whilst Apple can receive a fee for facilitating via the AppStore the initial acquisition of a new customer by developers, the fees charged by Apple go beyond what is strictly necessary for such remuneration. For example, Apple charges developers a fee for every purchase of digital goods or services a user makes within seven days after a link-out from the app.

Apple may respond to the EC’s preliminary findings in writing. A final decision regarding compliance with the law is due by March 25, 2025, the one year anniversary of the beginning of DMA proceedings against Apple.

The EC has also opened a separate investigation regarding Apple’s compliance with Section 6(4) of the DMA, which provides that:

The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications or software application stores using, or interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core platform services of that gatekeeper. The gatekeeper shall, where applicable, not prevent the downloaded third-party software applications or software application stores from prompting end users to decide whether they want to set that downloaded software application or software application store as their default. The gatekeeper shall technically enable end users who decide to set that downloaded software application or software application store as their default to carry out that change easily.

The gatekeeper shall not be prevented from taking, to the extent that they are strictly necessary and proportionate, measures to ensure that third-party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper, provided that such measures are duly justified by the gatekeeper.

Furthermore, the gatekeeper shall not be prevented from applying, to the extent that they are strictly necessary and proportionate, measures and settings other than default settings, enabling end users to effectively protect security in relation to third-party software applications or software application stores, provided that such measures and settings other than default settings are duly justified by the gatekeeper.

Specifically, the EC says it will investigate whether the Core Technology Fee, the multi-step process for downloading apps from alternative app marketplaces, and the eligibility requirements for running an alternative app marketplace are ‘necessary and proportionate’ under the DMA. The EC also notes that it is continuing to investigate Apple’s process for validating apps and alternative app marketplaces.

None of this is particularly surprising, given the complexities of the provisions Apple put into place in the wake of the DMA. The ‘necessity and proportionality’ of Apple’s changes are, by their nature, subjective determinations. That makes the DMA hard to comply with, but it also leaves ample room for the EC and Apple to negotiate a resolution of their dispute over the DMA. It’s time for the parties to put this dispute to rest.

Apple Says It Won’t Ship Major New OS Features in the EU This Fall Due to DMA Uncertainty→

A new round in the fight between the EU and Apple has been brewing for a while now. About a week ago, the Financial Times reported that unnamed sources said that the EU was poised to levy significant fines against the company over a probe of Apple’s compliance with the Digital Markets Act. Then, earlier this week, in an interview with CNBC, the EU’s competition chief, Margrethe Vestager telegraphed that Apple is facing enforcement measures:

[Apple] are very important because a lot of good business happens through the App Store, happens through payment mechanisms, so of course, even though you know I can say this is not what was expected of such a company, of course we will enforce exactly with the same top priority as with any other business.

Asked when enforcement might happen, Vestager told CNBC ‘hopefully soon.’

Apple made no comment to CNBC at the time, but today, that shoe has apparently dropped, with Apple telling the Financial Times that:

Due to the regulatory uncertainties brought about by the Digital Markets Act, we do not believe that we will be able to roll out three of these [new] features – iPhone Mirroring, SharePlay Screen Sharing enhancements, and Apple Intelligence – to our EU users this year.

Is it a coincidence that Apple made its statement to the same media outlet that reported that fines were about to be assessed? I doubt it. The more likely scenario is that Apple is using OS updates as a negotiating chip with EU regulators. Your guess is as good as mine whether the move will work. Personally, I think the tactic is just as likely to backfire. However, I’m quite confident that you’ll be hearing from me again about fines by the EU against Apple sooner rather than later.

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AppStories, Episode 382 – A Roomful of Suits: AltStore and Delta with Riley Testut→

This week on AppStories, we are joined by Riley Testut for a conversation about the history of AltStore from side-loaded app to official alternative app marketplace in the EU and Delta’s dominance of the Top Free App chart in the US and elsewhere..

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An Interview with Riley Testut

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Apple Changes How the Core Technology Fee Works and Confirms that Its Alternative Business Terms Will Apply to iPad Apps This Fall

One of the most controversial aspects of Apple’s response to the EU’s Digital Markets Act (DMA) was the introduction of a Core Technology Fee (CTF), which must be paid by developers who opt into Apple’s alternative business terms. Today, in a post on its developer website, Apple announced changes to the CTF and regarding the treatment of iPadOS, which was added to Apple’s DMA compliance obligations earlier this week.

The problem was that the CTF as originally conceived applied to all apps, including free apps. If a developer offered a free app and had first annual app installs of over 1 million installations, they would owe the €0.50 per installation fee, regardless of the fact they earned no income from the app. The fee, as proposed, would likewise be a problem for developers with other sources of income that weren’t enough to pay the CTF.

Today, Apple made two changes to the way the CTF works:

  • First, no CTF is required if a developer has no revenue whatsoever. This includes creating a free app without monetization that is not related to revenue of any kind (physical, digital, advertising, or otherwise). This condition is intended to give students, hobbyists, and other non-commercial developers an opportunity to create a popular app without paying the CTF.
  • Second, small developers (less than €10 million in global annual business revenue*) that adopt the alternative business terms receive a 3-year free on-ramp to the CTF to help them create innovative apps and rapidly grow their business. Within this 3-year period, if a small developer that hasn’t previously exceeded one million first annual installs crosses the threshold for the first time, they won’t pay the CTF, even if they continue to exceed one million first annual installs during that time. If a small developer grows to earn global revenue between €10 million and €50 million within the 3-year on-ramp period, they’ll start to pay the CTF after one million first annual installs up to a cap of €1 million per year.

The first change should take care of the free app scenario regardless of its popularity. The second change is designed to transition small businesses into paying the CTF. The first time a business with less than €10 million of global annual revenue crosses the CTF threshold, they won’t pay the fee. They will, however, have to start paying the fee up to a €1 million cap if the business’ global annual income grows to between €10 million and €50 million in that 3-year period. If revenue exceeds that range, the cap on the CTF presumably would not apply.

In the same post, Apple confirmed that the same EU rules that apply to iOS will begin to apply to iPadOS this fall and that a download of an app on both iOS and iPadOS will only count as one annual installation for CTF purposes.

The Talk Show, Episode 399: ‘I Decapitated the MacBook Air’ with Federico Viticci→

This week, Federico joined John Gruber on The Talk Show for a wide-ranging conversation about:

It’s a terrific episode from two people who have witnessed the evolution of blogging firsthand and Apple’s struggle to find a comfortable place for the iPad in its product lineup. That makes it the perfect warmup for next week’s Apple event.

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The EU Pulls iPadOS Into the DMA Fray

Today, the European Union announced that it has added iPadOS to the products and services subject to the Digital Markets Act (DMA). The designation gives Apple six months to comply with the DMA.

In a press release, the European Commission said:

The Commission’s investigation found that Apple presents the features of a gatekeeper in relation to iPadOS, as among others:

  • Apple’s business user numbers exceeded the quantitative threshold elevenfold, while its end user numbers were close to the threshold and are predicted to rise in the near future.
  • End users are locked-in to iPadOS. Apple leverages its large ecosystem to disincentivise end users from switching to other operating systems for tablets.
  • Business users are locked-in to iPadOS because of its large and commercially attractive user base, and its importance for certain use cases, such as gaming apps.

On the basis of the findings of the investigation, the Commission concluded that iPadOS constitutes an important gateway for business users to reach end users, and that Apple enjoys an entrenched and durable position with respect to iPadOS.

In a statement to Bloomberg, an Apple spokesperson said that:

…the company remains focused on delivering for European consumers, “while mitigating the new privacy and data security risks the DMA poses.”

iOS is already subject to the DMA, and Apple’s response meant that actions it took to comply with the law did not apply to iPadOS, leading to incongruous differences between the platforms. With the addition of iPadOS under the purview of the DMA, I expect some of those differences will need to be ironed out.

AltStore Is Now Available in the EU

It’s been ready for a while, but today, AltStore is finally available for iOS users in the EU.

Riley Testus, one of AltStore’s founders, had this to say about the launch:

This is a day I’ve been looking forward to for over 10 years.

I’m thrilled to announce a brand new version of AltStore — AltStore PAL — is launching TODAY as an Apple-approved alternative app marketplace in the EU. AltStore PAL is an open-source app store made specifically for independent developers, designed to address the problems I and so many others have had with the App Store over the years. Basically, if you’ve ever experienced issues with App Review, this is for you!

We’re launching with 2 apps initially: my all-in-one Nintendo emulator Delta — a.k.a. the reason I built AltStore in the first place — and my clipboard manager Clip, a real clipboard manager that can actually run in the background. Delta will be FREE (with no ads!), whereas Clip will require a small donation of €1 or more. Once we’re sure everything is running smoothly we’ll then open the doors to third-party apps — so if you’d like to distribute your app with AltStore, please get in touch.

AltStore is a self-hosted solution, meaning once it starts accepting third-party apps, those developers will have to host and promote their apps themselves. From a user’s standpoint, that means:

…there is no central directory of apps; the only apps you’ll see in AltStore are from sources you’ve explicitly added yourself.

Also, if you’re in the EU and have US and EU Apple IDs, sign into the EU one and download AltStore. Then, you’ll be able to log back in with your US Apple ID if you want, and AltStore will still work.

As Riley explains, this is a lot like Apple’s recently announced web distribution feature in the EU.

Thanks to Federico, we have screenshots.

Thanks to Federico, we have screenshots.

The AltStore team envisions their marketplace as a place for apps from indie developers and those that Apple won’t allow on the App Store, like the team’s Clip app. AltStore will use Patreon donations as its payment system for paid apps, just like AltStore and Delta have been doing for years. Also, AltStore will not take a commission on Patreon donations. However, AltStore will cost €1.50/year to cover Apple’s Core Technology Fee.

It’s exciting to see AltStore live in the EU. I wish it were available in the US too, and I recommend reading Riley’s blog post about what motivated him build AltStore. It’s about more than videogame emulators, which I love. That’s maybe where AltStore started, but it’s about the iOS indie developer community, which I love even more.

A First Look at AltStore in the EU→

Callum Booth, writing for The Verge, was able to try a pre-release version of the app marketplace flavor of AltStore, which – pending Apple’s approval – should be one of the first third-party marketplaces under the new DMA regulation. The installation process, as expected, is not exactly straightforward:

It goes like this: you begin by clicking a browser-based link to load the alternative store. From there, you receive a pop-up informing you that your installation settings don’t allow marketplaces from that developer. Then, you head into Settings, enable the marketplace, return to your browser, click the download link again, and receive another prompt asking you to confirm the install. Finally, you can open the store and browse the available apps.

Make sure to check out the screenshots in the story to see what the installation flow looks like in practice. Besides Delta, the Nintendo emulator created by the AltStore developers that has long been available as part of AltStore’s other (non-jailbreak) installation method, Booth tested Clip. This one is interesting since it’s a clipboard manager that can monitor changes to the clipboard in the background – something that is not allowed under traditional App Store rules:

Regarding the app itself, the version of Clip I tried differs from similar software offered on Apple’s App Store in that it constantly runs in the background. Normally, clipboard managers on iOS have to use a variety of workarounds to achieve comparable functionality. For example, Paste requires you to open the app each time you want to add something you’ve copied to the clipboard.

This is where Clip thrives, by comparison. When you copy something, you immediately receive a notification and can swipe down to save it to your clipboard. This means you have the option to add it if it’s something useful — like an address — or dismiss the notification if it’s something you don’t want logged, like a password. I found saving your copied items like this into a centralized location to be incredibly useful, as it makes sharing and reusing these snippets painless.

I’m very curious to see how Apple will go about notarizing apps that rely on native APIs to perform “unexpected” tasks; in this case, it sounds like Clip will integrate with MapKit to let the app stay active in the background and monitor changes to the system clipboard. (Remember when Pastebot for iOS implemented a silent audio track to run in the background? Some things never change.) Regardless, I’m keen to play around with these marketplaces as soon as I can, and I will report back.1

  1. Here’s a fun problem for me at the moment: I live in Italy, haven’t left the country in months, and I use a dual Apple ID setup with an Italian iCloud account and a U.S. App Store account. Despite my geographic location, iOS 17.4 (and the 17.5 beta) won’t let me access any of the new EU-only features yet. For example, the browser selection screen never came up for me after updating to iOS 17.4, and when I tried to install a beta version of AltStore that Riley Testut sent to me, iOS told me that my device isn’t “eligible” to install the app. I have to wonder: will iOS eventually understand that I’m an Italian citizen with a U.S. Apple ID? Or am I living in some kind of weird edge case that will never be fixed? We know that there’s a grace period for users who leave the EU, but what about the other way around? ↩︎
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The European Commission Announces an Investigation into Apple and Other Gatekeepers’ Compliance with the DMA→

The European Commission (EC) has opened non-compliance investigations against Apple, Google, Meta, and Amazon in connection with the Digital Markets Act (DMA). With respect to Apple, the EC is investigating the company’s approach to uninstalling system apps, changing default settings, and prompting users to pick alternate services, including browsers and search engines.

According to the EC’s press release:

The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, may be preventing users from truly exercising their choice of services within the Apple ecosystem, in contravention of Article 6(3) of the DMA.

The EC is also investigating the fee structure that Apple has implemented in connection with alternative app stores:

Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under Article 6(4) of the DMA.

The EC’s press release helpfully reminds Apple and the other DMA gatekeepers that:

In case of an infringement, the Commission can impose fines up to 10% of the company’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringement.

‘Turnover’ is an accounting term typically used in Europe that, for these purposes, is the functional equivalent of total revenue. The EC says that it intends to conclude the investigation announced today within 12 months.

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