How Rules Broke Apple’s App Store

Since it started in 2008, Apple’s App Store has mostly worked the same way in 175 countries. This includes the 30 percent fee Apple takes from every app sold.

Apple says this has been great for the economy. The App Store has made over $1 trillion, created over seven million jobs, and given Apple billions in profit every year.

But after almost 16 years, different rules in different places are changing how Apple runs the App Store.

In Europe, regulators are starting to enforce a new law called the Digital Markets Act. This law makes Apple open iPhones in the European Union to other app stores and ways to pay for stuff in apps.

Similar changes are happening in South Korea and the United States. And places like Britain, Japan, and Australia might also make Apple change.

This means the App Store, which used to be the same everywhere, is now different depending on where you live.

Apple is trying to adjust to these new rules. They say they’ve talked to the European Commission and developers to figure out how to change the App Store while keeping iPhones safe from scams and bad apps.

Apple still thinks it’s important to control the App Store to keep it safe and make sure apps are good quality. But they’ve made some changes, like letting smaller app makers pay less in fees and letting developers link to their websites for payments.

These changes might hurt Apple’s profits. Last year, the App Store made about $24 billion.

When the App Store started, Apple’s co-founder, Steve Jobs, said the 30 percent fee was a good deal. But over time, many developers got upset about it.

In 2019, Spotify complained in Europe, saying Apple was being unfair by not letting them tell people how to pay for their app. And in the United States, Epic Games sued Apple, saying it was breaking antitrust laws by making developers use its payment system.

These complaints made governments start to look at how the App Store works. In 2021, South Korea passed a law making app stores let developers use other payment systems. Apple agreed but still wanted a fee.

The same thing happened in the United States. A judge said Apple had to let developers use other payment systems. Apple agreed but still wanted a fee.

Now, Europe is making Apple change too. Apple has made some new tools for developers and given them three options. They can keep using the App Store and pay up to 30 percent in fees. Or they can pay less but with some extra fees. Or they can use other app stores but still pay fees.

But some developers say Apple’s plan doesn’t follow the new law. They say Apple is still charging too much.

We’ll have to wait and see what happens next. If Europe doesn’t like Apple’s plan, there could be a big legal fight. And that could make Apple change or pay a big fine.

But for now, Apple is still making money from the App Store, even with all these changes.