I think this point is going to be the biggest sticking point to EU regulators. Third party app stores not being able to reasonably distribute free apps is a massive competitive disadvantage.

Third party stores don’t pay the per install fee, at least not beyond the install fee for their own store.

Any apps distributed through third parties pay their own CTF if they meet the threshold.

Threshold doesn’t apply to third party app stores, they start paying per install of their store from the first install.

So third party stores can host free apps without worrying about the CTF for those apps.

>Any apps distributed through third parties pay their own CTF if they meet the threshold.

But that cost to free apps means that useful free apps won't sign up to the program, and therefore won't be available in the third party stores. It's a distinction without a difference. While I'm sure Apple will argue the distinction when they get pulled up on this, it's pretty obvious that the EU is expecting viable 3rd party stores and Apple will be forced to deliver it. The more they screw around the more likely that EU will set stronger regulations with less discretion on implementation.

GP was talking about alternative stores picking up the tab for the apps they distribute. That’s simply not the case.

Now you bring up a new concern.

Namely that useful free apps would get so popular outside of the App Store that they’ll reach 1M installs on EU iPhones within a given year and that the cost per install they owe over installs in excess of that 1M would be prohibitively costly that they’d rather not.

I think that’s a pretty significant difference from the other scenario, one in which alternative stores are on the hook for all the apps they host. Normally I would chalk it up to a difference of opinion, but we’re talking about significant factual differences.

Meta-discussion aside, I struggle to come up with an example of such an app that currently exists and would be subject to that CTF.

Non-profits, educational institutions and governments are exempt, so you’d almost certainly end up with an app by a company that extracts value out of it whether as a companion app to a service or some startup that’s burning through runway money.

Ultimately Apple wants to be paid for their IP, for the use of their frameworks and toolchain. Earlier this week some people were saying that Apple then should split off the fee for that from the commission. This is exactly that, and at a progressive rate where the first million installs is free, seems fair enough to me.

I see no viability issues for third party stores here because one way or another there is no free lunch.

> The more they screw around the more likely that EU will set stronger regulations with less discretion on implementation.

As someone who used to practice law in the EU on an EU and international level this always makes me chuckle. The EU and its bodies are not some benevolent dictatorship that can do whatever they want. They too need to move within the bounds of the law and have been burned when crossing those boundaries.

The DMA in its current form hasn’t even been subjected to adjudication, which on its own is going to be quite interesting, much less some hypothetical v2 that is stricter.

The main hurdle for the EU (and the US for that matter) is IP and property rights. You can’t legislate your way around that without significant overhaul which would reverberate across all of commerce.

Or put plainly: you can’t just say “what’s yours is now public domain”.

Closest you’re ever going to get is “what’s yours should be sold at a reasonable price to others” and it’s going to be one hell of a burden to convince a court that this isn’t a reasonable price at any given day, much less when there ample examples in the market that charge more.

Another, more fundamental issue specific to the EU is that European courts really don’t like laws that look like they target a specific company or individual. The DMA’s issue is that it doesn’t just look like that, it outright broadcasts that it does that.

Apple had a decent chance at fighting the DMA as it currently exists, so to be quite honest, I expected them to make some basic concessions, await enforcement actions by the EC and then fight that tooth and nail.

Instead, to my utter surprise, they capitulated in nearly everything and then went above and beyond the DMA requirements. The purpose of that is clear, to establish a very strong legal posture for the inevitable court case.

> The main hurdle for the EU (and the US for that matter) is IP and property rights. You can’t legislate your way around that without significant overhaul which would reverberate across all of commerce.

What?

Developing, compiling, distributing, and having users run an iOS app is not a "use of Apple's IP". The use of Xcode, SDKs, header files, etc is. What happens when an open-source SDK that is completely free of any Apple-copyrighted code comes around? What would the use of Apple's IP be then?

Have you ever developed an iOS app?

I ask this not as a gotcha, it’s a serious question.

There is no way to write an app that doesn’t use a single piece of Apple code.

Create a new project in Xcode, simply write print(“Hello, world!) right click on the print method, click “Jump to Definition” and you get to read Apple’s code.

To say nothing of all the boilerplate stuff (and more importantly all the stuff underneath it that is automatically created when you create a new project and that is necessary to run the app.

The open source SDK you talk about might be completely free of Apple’s code, but it most definitely makes use of Apple’s code.

> The open source SDK you talk about might be completely free of Apple’s code, but it most definitely makes use of Apple’s code.

It "makes use of Apple's code" in the sense that it calls iOS APIs. But the resulting binary wouldn't have Apple's IP, which is what matters for the purposes of copyright and patent law. When saying something "uses" an IP, we generally mean the exclusive rights granted to the holder by law. Merely interacting with an already-existing API on an already-existing copy of iOS is not "use".

If the opposite were true, all third-party aftermarket accessories for physical (patented) products that merely plugged in to the mechanisms and didn't implement them themselves would be illegal.

How is it a competitive disadvantage when even regular App Store free apps also have to pay the fee?

Oh I see: it seems like you only pay the fee if you choose to distribute outside the App Store.

Seems like apple worked around the law but EU won't stay idle on this.

The way this always works is the law says “X”, then various parties come up with self serving interpretations of what “X” means, if they don’t mutually align they may go to a judge to figure out who’s definition of “X” will prevail.

It’s a dance, everybody knows the steps. Tech companies know the longer they can keep making money with their version of “X” the better - even if they know damn well they will lose when it goes to trial - which can take over a decade in some cases.

Microsoft practically invented the game, Google and Meta perfected it, and Apple is catching up.

I think the EU is going to have a hard time changing this, though. Because if Apple can't make money from licensing fees, they're asking Apple to spend all the engineering time developing APIs, xCode, etc. for free. They have the money, but in business it's not great to have a business unit operate without its own revenue or a path to profitability.

> they're asking Apple to spend all the engineering time developing APIs, xCode, etc. for free

I find such arguments more than absurd,

1. They have no issue doing that on macOS

2. Apple needs third party developers as much as the other way around. They are not doing this for free, they would sell a lot less devices if third party Apps weren't supported.

If you've ever worked in an engineering team in a regulated market, this is commonplace. Regulators aren't here to ensure you, the regulated party, can make money. They are in place to ensure the marketplace as a whole is fair(ish). Compliance is costly.

Funny how compliance costing money is precisely what discourages new competitors in the market.

In this case regulation is the only thing causing competition, Apple was doing perfectly fine discouraging competitors themselves.

A lot of sensible regulation provides escape hatches for smaller companies to avoid the huge costs of compliance. The exception is where there should be absolutely no exceptions, like medical regulation or privacy.

Except that this regulation only applies to so-called gatekeepers, so it doesn't affect 99.9% of the companies out there. Even if you made your own phone with it's own app store, until you have a sizable part of the market, you won't be a gatekeeper under the DMA.

Which can be paid for by selling hardware devices.

The world does not own Apple any level of profit.

They're already pocketing 17% + the cost of every iDevice they sell. You're seriously going to say that's not enough?

They already regulate how high credit card interchange fees can be, even though the banks had to spend money on building and maintaining the credit card infrastructure. They also regulate how high mobile roaming costs may be, even though cellular networks have cost hundreds of billions to build. Of course, they're only doing that because the interchange fees and roaming charges were abuse of market power and in no proportion to the cost of actually providing the service. Just like Apple's Core Tech Fee is.

So there's not going to be any problem with putting limits on the amount of money Apple can leech. Nor will there be any downside to doing it. Apple will not put any less effort into their platform or tooling even if such limits were in place. Nor is there any chance that Apple will abandon the EU market.

(If Apple was charging a nominal fee instead of a punitive one, they'd have a much better argument. But for Apple, it's not about the money they make from the technology fee. It's about making sure that the regulation can't actually achieve its purpose of promoting competition, because Apple will have smothered the competition in the crib.)

Apple's lawyers have been working hard to make it non-viable for third-party app stores while still complying with the law I guess. Sounds like this will be a no go in it's first incarnation and EU will have to come back with an even stricter version probably removing all control from Apple. EU does not fuck around when it comes down to it with things like this.

Apple has zero leverage here. First, they are a foreign company so there is no local sympathy like in the Epic case. Secondly, the EU is already pissed off with Apple, hence the DMA. Thirdly, even if Apple doesn’t care what the EU thinks, their shareholders surely do, since the EU has the capacity to inflict huge financial damage on Apple, via fines, import bans and/or much more punitive regulations.

Fuck around, find out.

> there is no local sympathy like in the Epic case

Epic is in no way more "European" than Apple.

The Epic court case was in the US.

Sadly I bet they will get away with it. Apple is very good at this sort of thing.

Another example: It used to be that telecom companies used to milk cross country calls and data within the EU. The competition to provide cheap calls between countries was basically not working. So EU made it a requirement that you should not pay any extra at all for international calls between EU countries, and whatever data package you bought at home works everywhere within the EU with no extra charges.

And this was such a good change! The degree to which companies get away with shenanigans outside of the EU is crazy.

> So EU made it a requirement that you should not pay any extra at all for international calls between EU countries, and whatever data package you bought at home works everywhere within the EU with no extra charges.

Arguably that's not a new requirement, but simply the EU enforcing the existing single market rules.

It wasn't considered a part of the single market rules until new legislation was passed. It came into effect in 2019.

https://digital-strategy.ec.europa.eu/en/policies/intra-eu-c...

> Before Intra-EU communications were capped, the average standard price of a fixed or mobile intra-EU call tended to be three times higher than the standard price of a domestic call. While the standard price of an intra-EU SMS was more than twice as expensive as a domestic one. In some cases the standard price of an intra-EU call was up to ten times higher than the standard price for domestic calls.

I'd wager it's just going to take time, but the EU did successfully hamper Apple here. Give 'em some credit.

> Sadly I bet they will get away with it. Apple is very good at this sort of thing.

Which is why new iPhones still have Lighting connectors. Oh wait.

Just give it time to work its way out. We don't live in a cyberpunk dystopia yet.

For how long? EU is also pretty good at coming after companies. Remember when Apple dodged switching from Lightning when micro-USB was a thing and now they're forced into USB-C?

Which I think is a better outcome than if we’d gotten iPhones stuck on a local maxima of microUSB.

As a consumer, lightning is a more pleasant to use connector than micro and therefore, I’m glad Apple didn’t cave at that time.

But you could've got USB-C almost a decade earlier tho

What was the advantage to me as a consumer if a 2015 iPhone got USB-C? IMO, USB-C wasn’t an advantage over Lightning then. (USB-C was not yet a common connector and most Apple users already had Lightning cables or could get by with the one included with the phone. Apple users had 3 years of orientation-independent convenience before USB-C arrived.)

I still find plugging in the Lightning cable to be easier (less precise alignment needed) than a USB-C and by the time the iPhone 8 arrived with magnetic charging, any charging advantage to USB-C went away.

“Forced into”, as if apple hasn’t been producing literally every other items besides iphones with usb-c, based on their own choices.

Of course if there were a law like that, they will rather point their fingers at the EU, over their users blaming apple for the slight inconvenience of changing.

The DMA gives realtively broad interpretation power the the EU commission, so they can potentially shut this down without new regulation required.

It's obviously malicious compliance that hopefully isn't justifiable.

Apple is just trying to dodge regulations. They'll get slapped with a fine and told to behave soon enough.

How can they be fined if they found a way to comply with the law? The law must first be ammended

It remains to be tested if this truly complies with the law.

IANAL, but this probably doesn't pass the requirement of the DMA to be fair, reasonable and non-discriminatory. In many scenarios, these terms favor choosing the old terms where apps can only be distributed through Apple's App Store. In other words, Apple is using its gatekeeper position to benefit themselves, which is exactly what can't be done in the DMA.

Yes, except for nonprofits, educational organizations and such.

Alternative app stores have to pay the fee on every install with no threshold.

If I run an alt app store, why the hell would I give apple a single penny? What are they gunna do, pull my store from their store?

They won't sign your store app and it won't install on anyone's phone. And they'll probably add any previously signed versions to a revocation list so existing installs of your store will be deleted immediately along with all the apps you distributed. That's the power of remaining a gatekeeper...

Now that weems only enforceable through notarization and the DMA clearly states that this is not allowed.

(They'll argue that this fee is required to keep the platform save which is obviously bullshit)

If only this company selling 1000€ phones were allowed to make money off those phones somehow.

Yes?

What? How do you think they support developing the OS, running security, notarizing and reviewing your apps etc.

This needs to be funded somehow.

I'm surprised there are commenters who have such a strong view - that they should just be able to access all the benefits of the iOS ecosystem that Apple has built over many years, and then have all that access for free too.

I am equally surprised by your view.

Apple sells hardware. They don't give away software for free, you (generally) need their hardware per their licensing agreements.

You have to pay Apple $99/year to develop software for their ecosystem.

I pay them for their hardware, I pay them to let me write software -- you want me to pay them when others use my software? What about when others view photos I take with my phone? Do they want a cut of that too?

How anyone can think Apple's stance here is reasonable is beyond me. I haven't paid Microsoft anything in over a decade, I wonder how they can afford to fund Windows development?

It's funded by the comfortable margins on their hardware + the developer program fee. If the latter is somehow not big enough, they can raise it.

> One million free first annual installs. Membership in the Apple Developer Program includes one million first annual installs per year for free for apps distributed from the App Store and/or alternative marketplaces. [0]

[0] https://developer.apple.com/support/core-technology-fee/

For alternative app stores specifically: "First annual installs included in your Apple Developer Program membership can’t be used for marketplace apps."

[1]: https://developer.apple.com/support/alternative-app-marketpl...

It's not free for Apple to host free apps either. Free apps get subsidized by IAP and other paid apps. An alternate app store would subsidize the install cost for free apps with the money they make from their cut of IAP and paid apps.

Which is why the real solution is for a mechanism to install code on an iOS device 100% outside of Apple's control similar to side loading on Android.

I don't trust Apple at all with their capricious and arbitrary blocking of apps/updates. It was bad enough when it appeared to be mostly due to incompetence, but after what they did politically (and in concert with Google, Twitter and Facebook) to Parlor that's when any creditability they had for me in curating the app store went out the window. I don't care where you are on the political spectrum, when a company starts to go down that path it's a danger for all of us.

I didn't realize that the fee was for apps and not app stores.

But why? Apple is providing the whole ecosystem, operating system, security, notarization etc - there are costs to be covered.

Of course there are costs incurred per install. Previously there were covered by a higher 30% fee on app costs. Now, with opening up the platform to alternative stores, the EU has pushed Apple to a per-install model.

So to me, this seems completely reasonable as a standard iPhone user.

I understand the security and performance of the platform costs more - that is why I use an iPhone not an Android.

What costs are incurred per install?

Exactly zero, for alternate App Stores.

> Apple is providing the whole ecosystem, operating system, security, notarization etc - there are costs to be covered.

I paid $1300+ for my iPhone, I already covered those costs.

> Apple is providing the whole ecosystem, operating system, security, notarization etc - there are costs to be covered

How are they covering it on macOS?