Apple has further revised its compliance plan for the European Union’s Digital Markets Act (DMA) rulebook which, since March, has forced it to give iOS developers more freedom over how they can distribute and promote their content on its mobile platform.
The iPhone maker is already under investigation by the European Commission for suspected non-compliance with the DMA — a market contestability regulation that allows for fines of up to 10% of global annual turnover for violations (or 20% for repeat offenses).
Back in June, the EU confirmed it would directly probe the fee structure of Apple’s new DMA business terms, following complaints the company was using “junk fees” to try to circumvent the bloc’s rules. So these new amendments to Apple’s DMA plan are taking place in the context of that ongoing enforcement. Apple also claims it’s been taking feedback from developers which it says has informed the revisions to its compliance plan.
The new changes, which Apple has made available for developers to preview Thursday ahead of a planned consumer rollout this fall, concern the option it provides developers distributing apps in the EU which allows them to communicate external offers, such as by including links in their apps to redirect users to a website for making a purchase.
One big change Apple announced Thursday is that developers who include link-outs in their apps will no longer need to accept the newer version of its business terms — which requires they commit to paying the so-called “Core Technology Fee” (CTF) the EU is investigating.
In another notable revision of approach, Apple is giving developers more flexibility about how they can communicate external offers and the types of offers they can promote through their iOS apps. Apple said developers will be able to inform users about offers available anywhere, not only on their own websites — such as through other apps and app marketplaces.
How developers inform users of these offers is also being freed up, with no more Apple templates requiring certain language to be used. Apple said it will allow multiple URLs for link-outs, including links with redirects and intermediate links. However, it stipulates developers must not use URL parameters for tracking and profiling users for ad targeting.
Still, developers will be allowed to use an actionable link, i.e. a link-out that can be tapped, clicked, or scanned, to easily take users to their destination.
In another change, Apple is adding an option that will enable users to opt out of notifications it displays around link-outs, informing users they will be transacting outside the App Store if they purchase an external channel. However, Apple will continue to show these notifications by default unless users opt-out.
Apple refers to the notifications as disclosure sheets but developers critical of its approach to DMA compliance have attacked them as “scare screens“, arguing they’re intended to pressure iOS users not to leave the App Store.
New fee structure for link-outs
Alongside the bundle of aforementioned changes giving developers more freedom to use link-outs to send their iOS users to external offers, the company is revising its fee structure for link-outs via some further unbundling: Two new fees will apply to purchases completed by users of iOS apps via link outs.
Apple is branding the first new fee an “Initial Acquisition Fee” which it says reflects the value the App Store provides in connecting developers with customers in the EU. This fee will levy a 5% commission, both under Apple’s new business terms or its original terms.
The second fee is branded the “Store Services Fee” which Apple says reflects the ongoing services and capabilities it provides to developers, such as app distribution and management; App Store trust and safety (including App Review); rediscovery, re-engagement and promotional tools and services; and app analytics and insights.
This fee will be a 10% standard commission fee or a 5% discounted commission (e.g. for developers enrolled in the App Store’s small business program) under Apple’s new business terms; or 20% standard and 7% discount under Apple’s existing terms.
Apple says the new dual fee structure replaces the reduced commission it had applied in its new EU business terms (of either 10% or 17%).
The Initial Acquisition Fee will see Apple taking a commission of 5% on sales of digital goods and services made by a new app user on any platform for the first 12 months following an initial download from its App Store of an app with a link-out entitlement.
The fee won’t apply in the case of existing iOS app users; it will only apply to new users who download an app for the first time through the App Store, per Apple.
The Store Services Fee will see Apple taking a commission of 10% on the sales of digital goods and services made by app users on any platform that takes place within a fixed 12-month period from the date of any install, including app updates and re-installs, in the case of an iOS app that has the entitlement profile to link-out.
Apple says the fee will continue to be levied for existing iOS users who continue to receive installs of the app with link-out capabilities. But it says the fee will be reduced to 5% for the majority of developers enrolled in the app store small business program or with subscriptions after their first year.
Apple suggests the revisions will mean developers on both its new and existing terms will pay lower rates for linking out to offers through the App Store — especially so in the case of existing users.
