Apple has a new plan for its App Store. Many developers hate it.

After 15 years of dictating how apps are distributed on iPhones, Apple has been forced to take marching orders from European regulators. A new law aimed at boosting technological competition has required Apple to open up its devices to competing app stores and payment alternatives.

But app makers say Apple's response to the law, which is intended to give consumers and developers more choice, is a false choice. The plan, they say, includes new fees and rules that make it unaffordable and risky to implement the changes the law should have made.

The response is the latest chapter in a long-simmering battle between Apple and app makers. Apple says it needs to keep a tight rein on the App Store to ensure quality and security, while many developers say the company is ruling with an iron fist and abusing its power to pressure them for fees and compete with its own services like Apple Music and to thwart Apple. Pay.

European regulators largely sided with developers in writing the Digital Markets Act, a 2022 law that requires Apple to offer app makers alternatives for selling to iPhone and iPad users. In response to a March compliance deadline, Apple told developers last week that they essentially had three options in the European Union, where about 450 million people live.

They could stick with the status quo App Store system and continue paying Apple a commission of up to 30 percent on all sales. Alternatively, they could reduce their commission to 17 percent, while charging a new fee of 50 cents for every download over a million per year. Or they can avoid Apple's commission by distributing the app through a competing app store, while still paying Apple's download fees.

After doing the math, many developers said Apple offered a worse alternative. Some pointed out that a creator of a free app with 10 million downloads a year who chooses to distribute it through a competing app store would owe Apple about $400,000 a month because of the new 50-cent fee, a researcher said. compensation calculator that Apple released. That essentially guaranteed that they would stick with the existing App Store model, where they can distribute for free instead of selling through alternative marketplaces.

Spotify, the music streaming app that has filed an antitrust complaint against Apple in Europe, said it may abandon plans to add credit card payments for audiobooks and subscriptions because of the costs.

Epic Games, the maker of Fortnite, which sued Apple in 2020, said it had major questions about its plans to release a new game store because Apple's plan would give it the power to investigate competing app stores and approve. And Hey.com, an email and calendar service, said the proposal upended its plan to distribute software directly to users, which Apple doesn't enable.

“This cannot be what the European Commission intended, because it does not change the fundamental dynamics,” said David Heinemeier Hansson, one of the founders of Hey.com. “Apple has made the features so toxic and set the bar so high that it's clear no one should ever use them.”

The mounting criticism will test how aggressively the European Union will enforce its groundbreaking new digital policy. Executives at dozens of app companies have already called on EU regulators to reject Apple's proposal.

Apple said the policy was in line with EU law while limiting potential risks to users. “Apple's focus remains on creating the most secure system possible within the requirements of the DMA,” the company said in a statement.

Andreas Schwab, a member of the European Parliament who helped write the Digital Markets Act, said the committee would have to weigh Apple's proposal after March 7, when the rules take effect. Should the European Commission open a formal investigation, it could set off a protracted legal battle between EU regulators and one of the world's largest tech companies.

“It all comes down to money,” Mr. Schwab said. “Those who complain want to make more money, and Apple wants to make money with its own App Store.”

The response comes at an important time for Apple. The U.S. Department of Justice is considering antitrust charges against Apple for uncompetitive business practices, a case that could force the company to make more policy changes. Apple is also dealing with declining sales of iPhones, iPads and Macs. Wall Street analysts believe this trend will continue when Apple reports quarterly results Thursday for the three months ending in December. This week, the company is also releasing its first new product in nearly a decade, an augmented reality device called the Vision Pro.

The Digital Markets Act aims to create more competition in a digital economy dominated by the largest technology companies. These major platforms, including Amazon, Apple, Google, Meta, Microsoft and TikTok's owner ByteDance, will now face new restrictions when using their dominance in a particular area, such as smartphones, social media or e-commerce , to lock in users and undermine competing services. .

A spokesman for the European Commission, the executive branch of the 27-nation bloc, said it would not comment on Apple's policy changes before the March deadline. However, he noted that Apple and other major technology platforms were urged to review any changes they planned to make to comply with the DMA with the companies likely to be most affected, to ensure that the changes would not create new anti-competitive problems.

Apple said it had spoken to several developers before releasing its plan, but Apple did not extend its reach to some of its harshest critics, such as the Coalition for App Fairness, a Washington trade group with nearly 80 members, including Spotify and the Match Group, the maker of Tinder.

“If they were serious about following the law, they would have done so and tried to get people on side for their announcement,” said Rick VanMeter, executive director of the Coalition for App Fairness.

Apple said it had contacted more than 1,000 developers after the new policy was released last week and would hold sessions to answer their questions. The company said 99 percent of developers in the European Union would “reduce or maintain” fees owed, and pointed to support from people like Justin Kan, a co-founder of video game streaming service Twitch. “Apple is making big concessions and game developers now have more freedom than ever,” he continued X.

Others disagreed. Andy Yen, the CEO of Proton, a Swiss company that provides encrypted email and Internet services, said Apple is offering a false alternative to the existing fee structure in the App Store. He said the new option was so financially unaffordable, especially the 50 cent technology fee, that “no one in their right mind would choose it.”

Mr Yen said the change would cost Proton millions of dollars, partly because many of its users take advantage of the free services. Even if it wants to try out alternative app stores and payment methods, the company would have no choice but to stay with Apple's current terms, he said.

Apple's new system could upend many developers' business models. According to Data.ai, an app economy research firm, more than 260,000 apps use a so-called freemium model in which users pay nothing to download an app but have options to purchase premium features.

Because only a fraction of subscribers pay for content or goods, developers say they can't afford to pay a 50-cent fee for every download.

Apple has also included conditions in its new policy that prevent developers from reversing their decisions. Once a company like Spotify or Proton decides to switch to Apple's new pricing structure, there is no turning back.

“It is designed so that choosing the new system puts your business at enormous risk,” Mr Yen said. “It's a huge deterrent.”