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China Considers Investigating Apple’s App Store Policies

China’s antitrust regulator is reportedly preparing to investigate Apple’s business practices, specifically focusing on its App Store policies and fees. According to Bloomberg News, the investigation would examine Apple’s commission on in-app purchases, which can reach up to 30%, as well as restrictions on external payment services and alternative app stores. This move comes shortly after China imposed tariffs on U.S. goods, including products from companies like Google, as tensions between the two countries escalate.

Shares of Apple dropped 2.6% in U.S. premarket trading following the news. Discussions between Chinese regulators and Apple executives, as well as app developers, have reportedly been ongoing since last year.

This potential probe mirrors similar actions against other U.S. companies, including Google, which is also under scrutiny by China’s State Administration for Market Regulation. Apple has not yet commented on the situation.

 

Apple Updates EU App Store Policy Following Commission Probe

Apple Inc. has revised its App Store policy in the European Union following a probe by the European Commission. The Commission had charged Apple in June for breaching EU tech regulations, specifically criticizing the company’s restrictions on how developers could communicate with their customers outside the App Store.

Policy Changes

In response, Apple will now permit developers to promote offers and communicate with users directly from within their apps, rather than solely through external links to their websites. This change is designed to give developers more flexibility in how they engage with their customers and manage their sales.

However, Apple is introducing two new fees in place of the existing reduced commission for digital goods and services. These are:

  • 5% Acquisition Fee: Applied to new users acquired through the App Store.
  • 10% Store Services Fee: Charged on sales made by users on any platform within 12 months of app installation.

Currently, Apple charges different fees, including a core technology fee, a reduced commission for digital goods, and an optional fee for payments and commerce services. The new fees will replace the reduced commission structure.

Industry Reactions

Spotify, which has clashed with Apple over in-app link restrictions, expressed concern over the new fees. A Spotify spokesperson criticized the changes, stating that the proposed 25% fee for basic user communication appears to disregard the requirements of the EU’s Digital Markets Act (DMA).

The European Commission had previously criticized Apple’s fees for acquiring new customers through the App Store, deeming them excessive. The Commission plans to evaluate Apple’s compliance with the DMA and consider feedback from developers.

Regulatory Context

This action marks the first enforcement of the DMA against Apple, a regulation aimed at curbing the dominance of Big Tech. Violations of the DMA could lead to fines of up to 10% of a company’s global annual turnover.