Apple Cites Regulatory Obstacles in Implementing EU App Store Reforms

Apple has raised concerns about its ability to enact changes to its App Store policies in the European Union, stating that regulatory approval for proposed reforms has not been granted. The company's statement follows the recent closure of Setapp, an alternative app marketplace for iPhones, which has intensified scrutiny from EU regulators.

Setapp, operated by the Ukrainian company MacPaw, announced the discontinuation of its alternative app marketplace, citing the evolving and complex business requirements that no longer align with its operational model. The closure comes in the context of ongoing discussions between Apple and the European Commission regarding the Digital Markets Act (DMA), a regulatory framework aimed at increasing competition and consumer choice within the digital marketplace.

Apple reported that it had submitted proposals to address the EU's regulatory demands, specifically offering to reduce its fee structure for alternative app marketplaces. Previously, Apple had imposed a fee of 50 euro cents per app installation beyond the first million installations. The new proposal would lower this to a 5% revenue share, a change Apple claims it is not permitted to implement without explicit approval from the European Commission.

The technology company expressed frustration with what it perceives as a lack of response from EU authorities, stating that a formal compliance plan had been submitted in October but had yet to receive feedback. Apple further alleged that the regulatory requirements have shifted during negotiations, creating uncertainty and complicating compliance efforts. The company suggested that these developments could result in increased penalties and further investigations.

Apple also commented on the perceived demand for alternative app marketplaces, asserting that consumer interest is minimal. However, industry observers have pointed out that the terms set for third-party marketplaces may be unattractive to developers, potentially reducing competition and consumer choice. Despite Apple's stance, the European Commission is reportedly preparing to respond to the closure of Setapp, attributing the marketplace's difficulties in part to Apple's lack of action in implementing necessary changes to its business practices.

According to internal documents, the European Commission maintains that Apple has not enacted sufficient reforms to address the complexity and limitations of its current app distribution model. The Commission's forthcoming response may emphasize that the company's failure to introduce mandated changes has contributed to the challenges faced by alternative providers.

This ongoing situation highlights the broader tension between large technology firms and regulatory authorities over the control and governance of digital platforms. The outcome of these discussions is expected to have significant implications for app developers, consumers, and the regulatory environment within the European Union.