Appstore/ShutterStock
Apple's news and the market's reactions to the opening of the competition suggest that the legislators, who have so far allowed the tech giants to operate without regulatory restrictions, will be required for more aggressive legislation.
The European Union's "Digital Markets Act" (DMA) is the most significant legislative step, and will enter into force this March.
The law aims to regulate the activities of the technology giants, including search engines, browsers, virtual assistants, operating systems, cloud computing services and digital advertising services that have an annual turnover of 7.5 billion euros or more in the European Union and 45 million active users.
As part of the law, companies will have to limit the uses they make of personal information, limit the exclusivity of products or services they offer to end users, they will be prohibited from discriminating against advertisers who do not sell their services, and more.
Later, he will oblige them to allow the installation of third-party applications in their operating systems, allow effective movement of data to other platforms and services, and will prohibit giving priority to the company's products.
As you may recall, until today Apple collected astronomical user fees amounting to 30% of the revenue of app developers in which payments are made, prevented those developers from receiving payments externally, and discriminated against apps that directly compete with its products.
In response to the new law, at the end of last week Apple announced that it would allow the installation of other app stores on its devices, and that app developers would be able to make use of external payment systems.
And what about the small letters?
Apple users will be able to enjoy external competing applications, but each (IOS) application will go through Apple's approval process.
The developers will be able to collect money through external payment systems without fees, except for an additional fee of half a euro per year for each user over a million users.
Developers who choose to collect payments through the appstore will benefit from reduced fees: from 30% to 17% and from 15% to 10% depending on the type of transaction, in addition to an additional 3% fee.
As for the browser, Apple will display a screen that will allow users to select their default browser.
Apple's statement looks attractive at first glance, and it is adapted and meets the requirements of the "Digital Markets Act".
However, the suppliers and developers who read the fine print understand that this is the same lady with a makeover and that Apple is not really interested in lowering the threshold of entry into her world.
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Spotify is not impressed
And as always, the first to respond to Apple's announcement was of course Spotify, which has been warning against Apple's monopolistic behavior for years and has even issued a strong protest against the technology giant in the past.
In a long and detailed blog post, she described at length the hidden harm of Apple's apparent capitulation:
“As Apple has just shown the world, they don't think the rules apply to them... They've been behaving badly for years, but this takes the level of arrogance to a whole new place . Under the false pretense of compliance and concessions, they introduced a new program that is an absolute joke. Essentially, the old tax became unacceptable under the DMA, so they created a new tax that pretends to comply with the law."
The new conditions, accompanied by Apple's warnings to users regarding damages, fraud, cheating, illegal and offensive content that will harm the safety and privacy of users, hint at Apple's real goal - to discourage users from using external stores and payment systems.
Despite the excitement over the introduction of the Digital Markets Law, Apple found a way to empty it of its content.
Spotify CEO Daniel Ek even stepped up and shared his thoughts on X
Daniel Eck, CEO of Spotify
As Spotify kindly explained, "Why would Apple charge a flat annual fee for each user? This tax is a barrier to developers who wonder if the store will work for them. In practice, for it to work for them they need to stay with less than a million customers. I mean, they'll think twice if they want grow in the long term. The fee will be charged by Apple even if users downloaded the app and never used it and simply forgot to delete it."
According to him, "Apple's new conditions seem to put the developers in an unbearable situation. If they stay in the App Store and want to offer their own in-app payment, they will pay a 17% commission and an additional core fee of half a euro per year per install, which leaves them in pretty much the same situation to the old rules."
According to Ek, the current situation is even worse: "The new tax on downloads and updates can skyrocket and will probably increase the cost of customer acquisition and this is because the providers will be forced to pay for every installation or update, whether it is a free or paid application, even If in practice the users no longer use the service."
The dream and its break?
The markets, the users, the developers and the various start-up companies, expected the entry of the "Digital Markets" law into effect at least among the European consumers.
However, the conditions and stipulations accompanying the sowing of fear among its users imply that the opening of the competition they expected and hoped for is not real.
It does comply with the requirements of the law, but it is very doubtful whether it benefits the suppliers or the users and it seems that for now, the power will remain concentrated in the hands of Apple.
The current move is a step in the right direction.
At the same time, as a leader and trailblazer in the digital world, Apple could be expected to pay more than lip service.
It seems that even users who choose competitors will have to pay more for it.
This was not the intention of the legislator, and if the goal is real digital competition that will be reflected in the consumers' pockets, it seems that he will be required to take more drastic measures.
Attorney Shani Mizrahi is the owner of a strategy, crisis management and PR office.
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