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.

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.

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.

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.

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.

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.

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

> 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.

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

Which can be paid for by selling hardware devices.

The world does not own Apple any level of profit.

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.)