Copyright 9to5Mac
Apple’s opposition to the EU’s Digital Markets Act (DMA) antitrust legislation took a turn back in September when the company started arguing that the law should be repealed. It also suggested that more new features would be delayed for EU customers, and perhaps even new hardware. The company is now claiming a new study proves that the DMA fails to live up to one of its core promises: reducing app prices … A quick recap on Apple and the DMA Europe’s Digital Markets Act (DMA) antitrust legislation designated a number of tech companies as “gatekeepers” – meaning that they are powerful enough to use their market dominance to block competition. Apple was designated a gatekeeper because it hit a minimum user threshold, with one concern its monopoly over the sale of iPhone apps. It was told that it must allow people to buy and sell iPhone apps outside of its own App Store. The company complied, and there are now several alternative app stores for iPhone apps. Apple also offered alternative terms for EU developers who stuck with the App Store that could also result in slightly lower commissions. Apple denies that app prices have fallen The EU argued that having competing app stores would result in lower commissions and therefore lower app prices for consumers. However, an Apple-funded study carried out by The Analysis Group says it checked for reductions in app prices after commissions were reduced and says it can find very little evidence of this. The study looked at the impact of three developments, each of which reduced the commissions paid by app developers. First, the introduction of third-party app stores with lower commissions. Second, the alternative terms Apple offered to EU developers that cut its commission from 30% to 17% for large developers, and from 15% to 10% for small businesses. Third, the earlier introduction of the Small Business Program, which halved commissions for smaller developers. If the EU was right, Apple says it would expect to see app price reductions in line with the savings enjoyed by developers in each of the three cases. However, it says the study doesn’t support this. Examining 41M transactions across more than 21,000 affected apps, it found that around 90% of developers didn’t reduce app prices at all. Of the minority who did, the average reduction was just 2.5%. Apple told us: “The DMA has failed to live up to its promises, delivering less security, less privacy, and a worse experience for consumers across Europe. This study provides further evidence that the DMA is not benefiting consumers in the form of lower prices. At the same time, we know the regulation is creating new barriers for innovators and startups while exposing consumers to new risks.” The company also reiterated that the vast majority of developers pay no commission thanks to opting for ad-supported free apps, and that of the $1.3 trillion the App Store generates in global revenue, more than 90% of that goes to developers. The study is available on Apple’s website. 9to5Mac’s Take At the heart of all antitrust legislation is the belief that increased competition ultimately benefits consumers. That may be in the form of lower prices, or it may be companies keeping more revenue and therefore being able to improve the quality of the products and services offered to consumers. This study claims to prove that the price reduction resulting from the DMA is a very small one. Although it was funded by Apple, The Analysis Group is a very reputable company, so the results can almost certainly be trusted – and I have no difficulty believing that developers would seek to retain most of the savings. All the same, developers would argue that being better funded means that they can invest more in app features and performance, and therefore consumers benefit indirectly. Indeed, this was the very argument Apple made when it introduced the Small Business Program in the first place. The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem. Highlighted accessories Official Apple Store on Amazon Apple 40W Dynamic Power Adapter for iPhone 17 Official Apple iPhone Air cases and bumpers iPhone Air MagSafe Battery Official iPhone Air case Official iPhone 17 cases Official iPhone 17 Pro cases and Pro Max cases Image: Apple
