Apple Finally LOST.. (or did they?)

Summary

The 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

00:00

😯 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.

05:02

🤔 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.

10:05

😡 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.

Keywords

💡Antitrust

Antitrust refers to laws and regulations that promote market competition by limiting the power of large companies. In the video, antitrust is a major theme as Apple faces antitrust lawsuits and complaints in the EU over its control of the App Store. For example, Epic Games filed an antitrust complaint accusing Apple of App Store monopoly.

💡Monopoly

A monopoly is when a company has total control over a market with no competition. Apple is accused of having a monopoly over iOS apps through its App Store policies. For instance, the video says "epic games fighting back against apple and defying their App Store Monopoly".

💡App Store

The App Store is Apple's digital platform for distributing iOS apps. Apple has strict control over what apps are allowed on the App Store. The EU antitrust battle focuses on opening up the App Store to more competition.

💡Sideloading

Sideloading refers to installing apps outside the official App Store. The EU will force Apple to allow sideloading of third-party apps and app stores. This would threaten Apple's control of the iOS ecosystem.

💡Interoperability

Interoperability means systems and organizations being able to exchange data and work together. The EU's digital markets act will force Apple to allow iMessage interoperability with other messaging services.

💡Commissions

Commissions refer to the fees Apple charges on app purchases through the App Store, up to 30%. Lower commissions in the EU App Store are a concession Apple had to make, which may expand globally.

💡Epic Games

Epic Games makes the popular game Fortnite and initiated legal action against Apple over App Store commissions. This sparked more antitrust complaints against Apple in the EU.

💡Fortnite

Fortnite is a video game made by Epic Games that was banned from the iOS App Store, igniting the legal battle over Apple's monopoly.

💡EU

EU stands for European Union. The EU antitrust regulators have put pressure on Apple through lawsuits, fines, and new laws to open up iOS and reduce App Store control.

💡Compliance

Compliance refers to adhering to laws and regulations. Apple announced it will comply with EU laws, allowing sideloading and lower commissions in the EU App Store.

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

button to subscribe for more videos like

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