Apple Finally LOST.. (or did they?)
Summary
TLDRThe EU has filed antitrust lawsuits against Apple over the past decade regarding the App Store's policies and commissions. Epic Games sparked further scrutiny by circumventing commissions in Fortnite, leading Apple to ban it. Though Apple won its case against Epic, other companies like Spotify filed similar complaints. A new EU law forced Apple to allow third-party app stores and reduce commissions in EU. While a win for developers, Apple fights back with barriers like fees and warnings to disincentivize using third-parties. This is just the start of Apple's antitrust war as it tries balancing compliance and profitability.
Takeaways
- 😤 After a long legal battle, Apple has surrendered to EU antitrust regulations and made major changes to App Store policies
- 👮♂️ The battle began years ago over tax issues and monopoly accusations against Apple
- 🎮 Epic Games sparked further conflict by avoiding App Store fees in Fortnite
- 🤝 Multiple companies have since filed antitrust complaints against Apple's practices
- ⚖️ Apple lost a major 2022 court case forcing tech companies to use USB-C ports
- 📱 The EU Digital Markets Act then forced additional App Store changes from Apple
- 🔓 iOS 17.4 enables sideloading, third-party stores and payment systems in the EU
- 💰 Apple has reduced its app commission fee to 10-15% in the EU market
- 😠 But Apple fights back with barriers like fees and warnings against third-party stores
- 🤬 Epic Games CEO calls Apple's concessions a 'horror show' of loopholes
Q & A
When did the EU first accuse Apple of tax avoidance in Ireland?
-In 2013, the European Union accused Ireland of giving Apple massive tax breaks which allowed Apple to save billions of dollars in taxes.
What was Epic Games' strategy against Apple regarding Fortnite?
-Epic Games introduced a direct payment option in Fortnite to avoid Apple's 30% commission fee. This led to Fortnite being banned from the App Store, after which Epic launched a campaign against Apple's app store monopoly.
What antitrust complaints have been filed against Apple in the EU?
-Companies like Spotify and Epic Games filed antitrust complaints against Apple in the EU, accusing Apple of anticompetitive behavior and App Store monopolization.
How did the EU force Apple to adopt USB-C charging?
-In 2022, Apple lost a court case in the EU which outlined a plan to force tech companies to use a single charging port, USB-C. This directly targeted Apple's Lightning port.
What changes is Apple making to the App Store in the EU?
-Apple will allow third-party app stores, sideloading, third-party payment systems, and reduce App Store commissions to 10-15% in the EU. Game streaming apps will also be allowed.
How is Apple trying to undermine third-party app stores?
-Apple warns users that third-party app stores offer worse experiences. Also, a $1M letter of credit is required to launch a store, and fees are charged for installs over 1 million.
Why might free app developers stick with the App Store?
-Apple's new 50 cent per install fee above 1 million installs will make third-party app stores costly, especially for free apps. The 20% App Store commission may be preferable.
How did Epic Games react to Apple's announced changes?
-Epic Games CEO Tim Sweeney called Apple's announcement a "hot garbage horror show" on Twitter. The changes don't seem to satisfy Epic.
How does sideloading on iOS differ from Mac OS?
-On Mac OS, third-party apps can be downloaded freely online. But on iOS, Apple is still restricting sideloading and charging developers fees, keeping the ecosystem locked down.
What is next in Apple's antitrust battle?
-This is just the beginning of Apple's antitrust war. As Apple makes concessions in the EU, it may face pressure to change in other countries too.
Outlines
😯 History of Apple's EU Antitrust Battle
This paragraph provides background on Apple's antitrust issues with the EU starting in 2013 when Apple was accused of tax evasion in Ireland. Other events discussed include Epic Games' Fortnite dispute over App Store commissions, various antitrust complaints filed against Apple, and Apple's loss in an EU court case regarding mandated USB-C charging.
🤔 New EU Regulations Force Apple to Allow Alternative App Stores
This paragraph explains the new EU Digital Markets Act passed in 2022 that forces Apple to allow alternative app stores and sideloading in the EU. To comply, Apple created new APIs and options in iOS 17.4, like allowing third-party default browsers and game streaming apps.
😡 Apple Fights Back with Sneaky Fees and Warnings
Although complying in the EU, Apple warns of poorer experiences with third-party app stores. They also introduced new fees and app review processes to disincentivize developers from leaving the App Store. Tim Sweeney of Epic Games criticized these measures.
Mindmap
Keywords
💡Antitrust
💡Monopoly
💡App Store
💡Sideloading
💡Interoperability
💡Commissions
💡Epic Games
💡Fortnite
💡EU
💡Compliance
Highlights
After almost 3 years, Apple has finally surrendered and admitted defeat against the EU over antitrust lawsuits
Some exciting App Store changes are happening worldwide, and sadly for Apple this is just the beginning
Epic Games launched a massive campaign mocking Apple's App Store monopoly, hoping to get support to free Fortnite
Epic's lawsuit against Apple cost them hundreds of millions in sales, but helped spark more antitrust complaints
A new EU digital law forced Apple to allow third-party app stores and reduce App Store commissions
iOS 17.4 will be the first major update to rewrite the App Store in the EU, allowing sideloading and more
Apple created over 600 new APIs to support the changes, but also some to make third-party apps harder
Apple reduced App Store commissions from 30% to 10-17% in the EU to appease developers and regulators
Game streaming apps like Xbox Cloud Gaming can now be in the App Store globally due to the pressure
Apple warns the user experience won't be as good with third-party app stores in terms of features
Apple makes it hard for third-party app stores with big barriers like $1 million letters of credit
Constant popups will warn users in the EU they are leaving Apple's ecosystem when sideloading
Apple will charge developers 50 cents for each install over 1 million from a third-party app store
The fees may put developers like Epic in a worse position than Apple's old 30% commission
Free apps will still get charged the 50 cent fee per install over 1 million, really hurting devs
It will likely still make sense for many devs to stick with Apple's App Store despite the changes
Epic CEO Tim Sweeney called Apple's move a "horror show" but it's clear this antitrust war is just starting
Transcripts
the government is looking into big Tech
essentially whether companies like
Facebook Google and apple are too big is
Apple too big no I I don't think so so
you're saying you're not a monopoly we
are not a monopoly we are not a monopoly
after almost 3 years Apple has finally
surrendered and admitted complete and
utter defeat against the EU over their
Anti-Trust lawsuits yes it has already
been confirmed that iOS 17.4 will be the
first major update that'll completely
rewrite everything we knew about the App
Store in the EU including allowing
thirdparty app stores sideloading and
more but the craziest part is that some
incredibly exciting App Store changes
are happening worldwide and sadly for
Apple this first major loss is just the
beginning but before I explain what I
mean as well as going through and
explaining each and every new change I
first want to walk you through the
history of this major antitrust battle
all the way back in 2013 the European
Union accused Ireland of giving Apple
massive tax breaks which allowed Apple
to save billions of dollars in taxes and
after an over three-year battle they
declared that Apple must repay
$14.5 billion in back taxes and in 2018
they finally finished paying 15.3
billion in taxes to Ireland however in
July of 2020 Apple was able to get the
EU General Court to completely overturn
the decision ruling against the European
commission now I don't know how this is
going to end but one thing's for sure
Apple really pissed off the EU antitrust
Commission in the meantime tin Sweeney
over at Epic Games decided to craft a
master plan to add even more fuel to the
Anti-Trust fire and less than 1 month
later epic games introduced a brand new
direct payment option within their viral
game fortnite to completely avoid
Apple's 30% App Store commission system
and only a couple of hours later Apple
banned fortnite off of the App Store and
banned it remains to this day
immediately after the ban fortnite
launched a massive pre-planned campaign
against Apple dubbed free fortnite with
a short video that completely mocked
Apple's famous 1984 ad showing epic
games fighting back against apple and
defying their App Store Monopoly hoping
to win support from consumers to free
fortnite and get it back on the App
Store epic games subsequently launched a
lawsuit against Apple costing them
hundreds of millions of dollars in sales
and in April of last year Apple declared
Victory however that's not the end of
the story because in February of 202 21
epic games filed an EU antitrust
complaint against Apple joining other
companies who already filed complaints
and Spotify joined in on the fun in
April of 2021 accusing Apple of App
Store antitrust violations so it looks
like even though epic games lost their
direct lawsuit they were actually
successful in their attempt to spark a
trend of companies filing complaints
against Apple leading us to where we are
today and as we all know in October of
2022 Apple lost a major court case
against the European commission which
outlined a plan to force all tech
companies to use a single charging port
USBC which was literally meant to Target
Apple's lightning Port because every
other tech company was already using
USBC and later that month Apple admitted
defeat and said that they would comply
with the European Union and less than a
year later we have the iPhone 15 with a
USBC Port as well as other products like
the USBC airpods Pro but the biggest
threat of all came with a brand new
digital markets act in the EU which
passed into law in November of 2022
forcing Apple to allow other app stores
s side loading and iMessage
interoperability forcing Apple to get to
work on those new features and now
finally on January 25th 2024 Apple has
officially surrendered and announced a
massive list of changes to iOS Safari
and the App Store in the European Union
starting with iOS
17.4 so with that said let's get into
the juicy details first of all Apple had
to create more than 600 brand new apis
to support all of these changes as well
as some sneaky ones that Apple put in to
make it more difficult for thirdparty
apps to make it on the iOS platform
starting from the top Apple cat created
new Frameworks and apis for creating
alternative app marketplaces apis for
Distributing those apps to users new
Frameworks and apis for creating
alternative browser engines and an
additional interoperability request form
for any additional requests they even
created new apis enabling developers to
use Apple's NFC chip technology in their
Banking and wallet apps to basically
replace Apple pay as the default for the
first time but of course only in the EU
area on top of that they finally allowed
users to set a third-party web browser
as their default including the support
for full web browser engines without
using webcan they also added new options
for payment service providers processing
payments via linkout and much more so it
looks like iPhone users in the EU are
going to have the most Free iOS
ecosystem we've ever seen but but most
interesting of all apple is now allowing
game streaming apps in the App Store
like Xbox cloud gaming and Nvidia
GeForce now and guess what these changes
are coming to iOS users around the world
not just in the EU and it seems like
this is a direct result of all of the
backlash complaints and lawsuits that
Apple's been going through which is bad
news for Apple because if they give
people just a little bit of slack people
are going to be asking for more but by
far the biggest deal is that Apple
officially reduced their App Store
commissions from up to 30% down to only
10 to 177% in the EU as well as an
additional 3% fee for those who want to
continue using Apple's App Store Payment
Processing system so right about now
developers in the EU are getting very
excited because of these lower
commissions and the rest of the world is
subsequently getting very jealous which
makes me think Apple might eventually be
forced to bring these changes to more
and more countries over the coming years
as more lawsuits spark up so this is
only the beginning of the war for Apple
but for the time being Apple released a
statement explaining why they won't
bring these major iOS changes to the
rest of the world money of course just
kidding Apple says they really want to
protect their users from malware fraud
and scam risks a thank you Apple how
sweet so it sounds like apple has
completely surrendered to the EU but no
they're actually fighting back in some
pretty sneaky ways using certain
loopholes to protect their profits first
of all Apple has already warned that the
user experience won't be as good if you
end up purchasing apps through
third-party app stores restrictions on
inapp purchases and Screen Time family
purchase sharing for apps and
subscriptions ask to buy Universal
purchase and more features will simply
not be supported anymore and apple will
of course no longer support users with
refunds purchase history subscription
management and cancellation violations
of user data privacy abuse fraud and
manipulations if you choose to download
from third-party app stores so apple is
basically saying best of luck you're on
your own but apple is really going hard
after the large Developers like epic
games who want to release their own epic
games store on iOS Apple says that all
thirdparty app Marketplace creators must
provide Apple a standby letter of credit
from an a-rated financial institution of
1 million EUR prior to receiving
permission to release their thirdparty
App Store this comes as a huge surprise
and basically creates a massive barrier
of entry and huge pain for anyone
thinking of creating their own app store
but wait it gets worse Apple's going to
annoy users with constant popups warning
them that they're downloading apps from
alternative app stores or using
alternative Payment Systems there's also
going to be inapp disclosure popups
warning users that they're no longer
transacting with apple but on the
developer side Apple's introducing new
app review processes to verify that
developers are accurately communicating
information about transactions that use
alternative payment processors making it
even more difficult to get apps approved
but the absolutely worst of it all is
that apple is introducing a brand new
core technology fee that will charge
developers 50 cents for every single app
install that users make over a 1 million
install threshold within their new third
party party app stores and guess what
that also includes installations of the
actual App Store itself before
downloading any actual apps within that
App Store so this means that thirdparty
App Stores get double screwed and
developers within those app stores also
get screwed because that 50 c fee
applies to all app downloads over a
million including free apps so let's say
theoretically 2 million people download
the free game fortnite within the new
epic games store that actually comes out
to 4 million downloads two for the App
Store itself and two for the game that
means that epic games is now over the 1
million threshold by 3 million downloads
meaning they would have to pay Apple 50
cents each per download totaling $1.5
million in fees going straight to Apple
for a free game so epic games better
hope that those 2 million people that
downloaded fortnite for free spend at
least $1.5 million on inapp purchases or
else they're losing money potentially
putting them in an even worse situation
than they were before with Apple's 30%
commissions and honestly it's going to
make more sense for many free app and
game developers to stick with Apple's
app store and the new lowered 20%
commission structure and that is exactly
why epic gam CEO Tim Sweeney went to
Twitter to call Apple's announcement a
hot garbage horror show but one thing's
for sure appside loing looks like it
won't be anything like how it works on
Mac OS where you can go online and
download thirdparty apps for free
Apple's going to keep iOS locked down
forcing developers to continue paying
Apple One Way or Another so with that
said it's pretty clear that this is only
the beginning of Apple's antitrust War
but that's enough for today's episode so
if you enjoyed it click that Circle
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this one thanks for watching and we'll
see you in the next video you're saying
you're not a monopoly we are not a
monopoly we are not a monopoly we are
not a monopoly
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