Apple might be in danger of paying an expensive fine because of Apple’s unfriendly method on the App Store.
Image Source: Ngantech
On Monday, June 24, 2024, Apple will face the consequence of crossing the EU’s rules borderline because Apple does not allow customers to choose alternative apps/methods other than using the App Store, especially when some apps, products, or subscriptions from App Store are slightly or even much more expensive than the competitors.
Developers Are Not Allowed to Inform Cheaper Alternatives
Apple has already told developers that they couldn’t disclose information about the fact that app prices on third-party apps are cheaper than those on the App Store. Developers can still distribute their apps to other alternatives, but they can’t inform or tell anything about cheaper alternatives in the App Store or social media.
Apple is currently taking 30% fees for any transactions in the App Store (For example, if the customer wants to buy a book for $10, they need to pay an extra $3 before the customer can read it. This also applies to any in-app purchases from games or other apps). If the developers bypass that extra 30% fee by telling customers about cheaper methods in the App Store or social media, Apple will lose the top spot in the storefront business.
But the EU Won’t Let This Keep Happening
In mid-March, the EU saw this chaos and decided to investigate Apple’s non-compliance through the DMCA (Digital Markets Act). The European Commission stated that Apple violated the steering rules by blocking businesses from telling customers about cheaper options for apps or subscriptions outside Apple services.
Based on the EU’s tech laws, All developers doing business in the EU, including the App Store, must have the freedom to maximize their business potential and capabilities, especially the ability to compare price rates between other third-party storefronts.
If the court finds Apple guilty of this non-compliance, Apple needs to pay 10% of its annual turnover, based on DMA laws. The fine might be larger than when Apple must pay €1.8 billion (or $1.93 billion) for a similar violation over music streaming.
Customers Still Need to Pay Extra Fees Outside App Store
Even customers still able to download/pay outside App Store, they still need to pay extra 50 euro cents ($0.54) for “core technology fee”. DMA still investigates whether this practice complies with DMA.
This Big Fine Might Affect Apple Vision 2nd Development
Apple is currently making an affordable version of Apple Vision, and they still have trouble developing it. First gen of Apple Vision costs $3,499 and it was already too expensive for commoners. And because Apple need to pay extra for their violations, Apple probably increase the price of Apple Vision or delay Apple Vision 2nd development. Apple is multi-billionaire company but they still need to gain their turnover back for future projects.
Closing Words
Apple might be doing its business to maximize profit. However, this is also a big risk; Apple probably has zero ideas about rules from specific countries like the EU or intentionally avoids them. It’s better if other billionaire companies learn from this lesson, to prevent the same fate from happening.
