Apple has suffered a major setback in Europe after losing its legal challenge against the European Union's Digital Markets Act (DMA). The tech giant brought the action in an attempt to overturn the EU designating it a "gatekeeper". This specific designation requires the company to open its App Store and iPhone operating system to greater competition from rival apps and services.
Following the ruling, Apple's long-running app store battle with the EU over iPhone apps appears to finally be over. Under the newly revised terms, developers will pay a commission or fee ranging from 5% to 26%. The exact rate applied will depend on their turnover and chosen sale channels.
Sweeping App Store Changes
Under the new terms, Apple is removing the Core Technology Fee. For developers distributing apps outside the iPhone maker's marketplace, Apple is scrapping the per-install Core Technology Fee entirely and introducing a flat 5% commission on digital sales. Furthermore, alternative, third-party app stores in the European Union will also be charged a 5% commission on in-app purchases.
The updates also streamline how developers operate across the broader iOS ecosystem. Developers will no longer need separate agreements for the App Store and alternative app marketplaces. Instead, a single agreement now covers both distribution models, marking one of the most significant updates to its app distribution model since the Digital Markets Act came into force.
The Legal Battle and DMA Context
Apple first took its protests to the court in 2024. The recent ruling significantly strengthens the position of EU antitrust regulators. These regulations are directly aimed at curbing big tech's market dominance and giving rivals more room to compete.
The EU Digital Markets Act sets out a strict list of do's and don'ts for big tech. Companies facing this legislation operate under the threat of fines of as much as 10% of global annual turnover. The landmark legislation has triggered legal challenges by Apple, Meta, and ByteDance since it took effect in May 2023.
Despite the recent loss at the General Court, the legal process may not be entirely over. Apple can still appeal on matters of law to the Court of Justice of the European Union, which serves as Europe's highest court.