Apple has been fined a whopping €500 million ($570 million) by the European Commission for breaching the EU’s Digital Markets Act, all because of a rather unpopular policy that prevents app developers from telling users about cheaper payment options outside of Apple’s App Store.
The EU argues that Apple’s rules result in higher costs for everyday users. Customers end up paying an “Apple tax” when subscribing to services like Spotify or Netflix through the app. This is because Apple takes a cut of every in-app purchase made via its payment processing system, and it forbids apps to include links to alternative options. That’s why signing up from a business’s website is often considerably cheaper than subscribing in-app.
Several big companies, such as Netflix, have notably avoided using in-app payments at all to sidestep Apple’s fees. Users must be existing members to use the app, which keeps pricing consistent – but under the current rules, Netflix and others are prohibited from guiding users to their own sign-up pages. If Apple is forced to lift these restrictions, developers could inform consumers directly about their own cheaper payment options, potentially saving users significant money. Changing these rules might affect Apple’s bottom line, but it feels like a win for consumers.
This isn’t the first time Apple has faced a telling off from the EU. Recently, the Digital Markets Act forced Apple to permit third-party app stores in a bid to combat Apple’s monopoly over app sales – albeit only within the EU. It’s likely that if Apple complies to this latest ruling without a fight, it might once again only make the change for Europe-based users. That said, this kind of pressure can eventually lead to wider changes worldwide. It might not be long before we can all avoid the Apple tax with relative ease.