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Posts tagged with "regulation"

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.

Automattic Acquires Messaging Integrator Beeper→

Mark Gurman, writing for Bloomberg, reports that Beeper, the messaging app that ultimately lost its fight to bring blue bubbles to Android, has been acquired by Automattic, for $125 million according to his sources.

You may recall that Automattic, the company behind WordPress, Tumblr, Day One, Pocket Casts, and other endeavors, acquired a company called Texts last fall. Roughly two months later, Beeper took advantage of a loophole in iMessage’s architecture to offer iMessage natively on Android. After some back and forth, Apple ultimately blocked the technique Beeper was using.

According to Gurman, Automattic is acquiring Beeper’s team of 27 employees, its app, which integrates services like Signal, Facebook Messenger, and Slack, and about 100,000 customers. Of those things, I suspect the people and the customers were most important to Automattic because, as I explained in my story about the company’s purchase of Texts, the two services run on different technology stacks. Regardless of Automattic’s underlying motivations, it’s more apparent than ever that the company is betting that consumer demand, government regulation, and antitrust lawsuits will open up messaging platforms for companies ready to integrate them.

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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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US Department of Justice and States Sue Apple Under Federal and State Antitrust Laws

The US Department of Justice and 16 states have sued Apple for antitrust violations in an 88-page complaint filed in New Jersey federal court. At the time of publication, the DOJ’s press release, which has been shared with some media outlets, has not been published on the DOJ website, although I expect it will be before long. In response, Apple says:

At Apple, we innovate every day to make technology people love—designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.

We’ll have a more detailed breakdown of the plaintiffs’ allegations against Apple soon, but the allegations are broad, claiming that:

  • Apple has monopolized or attempted to monopolize the smartphone market under the federal Sherman Act;
  • Apple has monopolized or attempted to monopolize the performance smartphone market under the federal Sherman Act and Wisconsin and New Jersey antitrust laws

(emphasis added).

The DOJ and states argue that Apple’s alleged anticompetitive behavior extends beyond its effect on users and developers to touch a wide swath of the economy:

Critically, Apple’s anticompetitive conduct not only limits competition in the smartphone market, but also reverberates through the industries that are affected by these restrictions, including financial services, fitness, gaming, social media, news media, entertainment, and more. Unless Apple’s anticompetitive and exclusionary conduct is stopped, it will likely extend and entrench its iPhone monopoly to other markets and parts of the economy. For example, Apple is rapidly expanding its influence and growing its power in the automotive, content creation and entertainment, and financial services industries–and often by doing so in exclusionary ways that further reinforce and deepen the competitive moat around the iPhone.

The DOJ and states seek a number of different remedies, including:

a. preventing Apple from using its control of app distribution to undermine cross-platform technologies such as super apps and cloud streaming apps, among others;

b. preventing Apple from using private APIs to undermine cross- platform technologies like messaging, smartwatches, and digital wallets, among others; and

c. preventing Apple from using the terms and conditions of its contracts with developers, accessory makers, consumers, or others to obtain, maintain, extend, or entrench a monopoly.

There’s a lot to digest in the complaint, which you can read for yourself here. I highly recommend reading at least the introduction to get a better sense of what Apple is being accused of. Keep in mind that this is just one side of the story, but Apple will tell its side in more detail soon enough. And, of course, I will be back soon with a more detailed look at what this lawsuit is all about and what’s at stake.