Since launching the App Store in 2008, Apple has managed it largely the same way across 175 countries, down to the 30 percent commission it has collected on each app sold.

The company calls the result an economic miracle. The store has generated more than $1 trillion in sales, helped create more than seven million jobs and earned Apple billions of dollars in annual profits.

But as the App Store approaches its 16th anniversary, a patchwork of local rules is undermining Apple’s authority over it.

On Thursday, European Union regulators will begin enforcing the Digital Markets Act, a 2022 law that requires Apple to open iPhones to competing app marketplaces and alternative payment systems for in-app sales.

The changes follow similar demands in South Korea and the United States, where Apple has been forced to allow alternative payment processors. Similar concessions are being discussed Britain, Japan And Australia.

The rules ensure that what was once a single store is divided into a tangle of digital stores across national borders. The once uniform experience of buying software on an iPhone now differs depending on where people live.

“The App Store is becoming completely fragmented,” says Eric Seufert, who invests in app makers and runs Mobile Dev Memo, a blog about the app economy. “The approach to compliance is pretty much the same: ‘Let’s lower the fee a little bit.’ But it’s painful.”

Apple has worked hard to adapt to the changing regulatory landscape. An Apple spokesperson said the company had spent months talking to the European Commission about the Digital Markets Act and holding meetings with developers as it developed plans to change the App Store while minimizing the risks of malware, fraud and scams on iPhones .

Apple says its control over the App Store is critical to the security and quality of the apps it distributes. The company has not specified the 30 percent commission. But over time it has made some concessions to developers and regulators, lowering the commissions smaller app makers pay and allowing developers to link to their websites to directly charge users for subscriptions .

The changes are expected to reduce Apple’s sales and profits. According to Bernstein Research, the App Store generated an estimated $24.12 billion in revenue last year.

When the App Store first appeared, Apple co-founder Steve Jobs said the fee was “a great deal” because any developer – big or small – could deliver software to every single iPhone. But Apple’s fees have been a source of frustration for developers for years. Over time, regulators began to listen to these complaints.

In 2019, Spotify filed a complaint against Apple in Europe, accusing the company of anti-competitive practices for preventing streaming music services from advertising where and how users could subscribe to their app. A year later, Epic Games, the maker of Fortnite, filed a lawsuit in U.S. federal court accusing Apple of violating antitrust laws by forcing developers to use its payment system.

The complaints prompted developers around the world to lobby for changes in the app economy. In 2021, South Korean lawmakers were among the first to respond by passing legislation to force app store operators to allow alternative payment systems. Apple relaxed its requirement that developers use its in-app payment service, but said developers who used alternative services would owe Apple a fee 26 percent commission in sale.

Developers have argued that the new commission rate is the same as the 30 percent rate after credit card processing fees are added. Their criticism was echoed by regulators in South Korea, who said Apple’s plan undermined the purpose of the law. The country’s telecom regulator said this Apple could be fined $15.4 million for ‘unfair practices’.

Apple said it disagreed with the conclusion of regulators in South Korea and believed the changes complied with the law.

The company took a similar approach in the United States. During the Epic Games lawsuit, Apple CEO Tim Cook said that being forced to offer alternative payment systems “would be a mess.”

“We would have to come up with a different system for billing developers,” he said, adding that Apple would still charge a commission.

The federal judge in the case ruled in 2021 that Apple must allow alternative payments in the United States. Apple complied with this as well as in South Korea, except it said developers who used alternatives were required to do so a commission of 27 percent.

“It’s clearly window dressing,” said Colin Kass, an antitrust attorney at Proskauer Rose who has no connection to the case. “Does this satisfy the court? Maybe.”

Apple said the judge upheld the right to charge a commission, and that the resolution complied with the judge’s request to allow out-of-app purchases. Epic said it planned to file a motion to challenge the 27 percent fee and ask the court to intervene.

In 2022, the European Union passed the Digital Markets Act to, among other things, introduce competition in the App Store on iPhones. Apple had two years to comply.

The company’s engineers have spent thousands of hours creating more than 600 new software tools for developers. In January, the company introduced these tools and outlined three options for app makers in the European Union, where about 450 million people live.

Under Apple’s plan, developers could stick with the status quo App Store system and pay up to 30 percent commission on sales. They could reduce their commission to 17 percent, while adding a new fee of 50 euros to every download over a million per year. Or they can avoid Apple’s commission by selling through a competing app store and still paying the download fees.

Apple said the plan was in line with the law and meant 99 percent of developers in the European Union would reduce or maintain fees owed.

But app makers said the plan violated the letter and spirit of the law. Under the new rules, a tech giant like Apple must allow app makers to sell subscriptions and services outside their apps “for free,” said Damien Geradin, a European antitrust lawyer who advises app developers. He said Apple’s 50 cent fee and 17 percent commission violated that part of the law.

European regulators will not act on Apple’s proposal until Thursday after the effective date. Should they open a formal investigation, it could trigger a protracted legal battle that could force Apple to change or risk fines of up to 10 percent of its global annual revenue, which was nearly $400 billion last year.

Mr. Geradin said Apple is unlikely to succeed, but could continue to collect commissions in the meantime.

“It’s part of their tactics,” he said.

Over the past decade, many Apple employees working on the company’s secret car project, internally codenamed Titan, had a less flattering name for it: the Titanic disaster. They knew the project was likely to fail.

Throughout its existence, the automotive effort was scrapped and restarted several times, losing hundreds of workers along the way. Reflecting dueling views among leaders about what an Apple car should be, it started as an electric vehicle that would compete with Tesla and morphed into a self-driving car that could rival Google’s Waymo.

By the time of his death — Tuesday, when executives announced internally that the project was being halted and many members of the team were being reassigned to work on artificial intelligence — Apple had spent more than $10 billion on the project and the car had returned. According to half a dozen people who have worked on the project over the past decade, it started out as an electric vehicle with driver assistance features that rival Tesla’s.

The demise of the car project was a testament to how Apple has struggled to develop new products in the years since Steve Jobs’ death in 2011. The effort had four different leaders and led to multiple layoffs. But it persisted and ultimately failed largely because developing the software and algorithms for a car with autonomous driving functions proved too difficult.

Apple declined to comment.

“When it started, it focused the stars on something that Apple could only hit a home run with,” said Bryant Walker Smith, an associate professor at the University of South Carolina schools of law and engineering, who spoke briefly to Apple about his project in 2015. “A decade later, the stars have aligned again, meaning this is a lot of risk and not much reward.”

When Apple launched its car project in 2014, it was among a rush of investors, executives, engineers and companies chasing the idea of ​​a self-driving car. After Google began testing prototypes on public roads in California, voices in Silicon Valley urged that autonomous vehicles would soon become commonplace. Apple didn’t want to be left behind.

At the time, the company was facing questions from its top engineers about its next project, according to three people familiar with the project’s origins. The Apple Watch had just been completed and many engineers were restless about starting something new. Apple CEO Tim Cook approved the project in part to prevent an exodus of engineers to Tesla.

Apple also had to find new ways to expand its business. The company expected iPhone sales to slow in the coming years. Cars were part of a $2 trillion transportation industry that could help Apple, which by then was a nearly $200 billion company.

Despite a vote of confidence from Apple’s CEO, members of the team knew they were operating against a harsh reality, according to the six employees familiar with the project. If it ever came to market, an Apple car would likely cost at least $100,000 and still generate razor-thin profits compared to smartphones and earbuds. It would also come years after Tesla had dominated the market.

The company had some discussions with Elon Musk about acquiring Tesla, according to two people familiar with the discussions. But ultimately it decided that building its own car made more sense than buying and integrating another company.

Mr Musk did not respond to a request for comment.

From the start, the project was plagued by differing views of what it should be, the people familiar with it said. Steve Zadesky, who initially led the initiative, wanted to build an electric vehicle that competed with Tesla. Apple Chief Design Officer Jony Ive wanted to pursue a self-driving car, which members of the software team believed was possible.

Apple, which had $155 billion in cash by then, spent lavishly hiring hundreds of people with experience in machine learning, a type of AI technology and other capabilities crucial to creating a self-driving car. The influx of people made this one of the first projects Apple had developed with so many outsiders new to the company’s culture.

This year’s car team, which consisted of more than 2,000 employees, was made up of engineers who had worked for NASA and developed racing cars for Porsche.

The group developed a range of new technologies, including a windshield that could display turn-by-turn directions and a sunroof with special polymer to reduce the sun’s heat.

To boost morale and guidance, top executives like Mr. Ive and the head of Mac engineering, Bob Mansfield, got involved. The company acquired several startups to join its automotive team. To make the project successful, Apple put Kevin Lynch, the director behind the popular Apple Watch, in charge of the car in 2021.

Mr. Ive and his team of designers drew concepts for a car that would look like a European minivan, like the Fiat Multipla 600, which has half a dozen windows and a curved roof. It had no steering wheel and would be controlled with Apple’s virtual assistant, Siri.

One day, in the fall of 2015, Mr. Ive and Mr. Cook met at the project’s headquarters in Sunnyvale, California, for a demonstration of how the car might work. The two men sank into the seats of a cabin-like interior. Outside, a voice actor read from a script what Siri would say as the men drove down the road in the imaginary car. Mr. Ive asked Siri which restaurant they were passing and the actor read out an answer, two people familiar with the demonstration said.

But by 2016 it was clear that the automotive effort was in trouble. Mr. Zadesky left Apple and his successor, Mr. Mansfield, told the team working on the project that they would shift their focus from building a car to building self-driving car software, three people familiar with the shift said.

Apple has received permission from California to begin testing Lexus SUVs equipped with sensors and computers. It held talks with automakers such as BMW, Nissan and Mercedes-Benz before striking a deal with Volkswagen to supply Transporter vans for self-driving shuttles on Apple’s campus.

In the years that followed, two more leaders took over the automotive effort. Doug Field, former Tesla CEO, more than 200 employees laid off about the project while he was working on building a self-driving system. Then Mr. Lynch, who succeeded him in recent years, reversed the company’s plans and returned to the original idea of ​​creating an electric vehicle.

Mr Mansfield and Mr Field did not respond to requests for comment.

Early this year, Apple’s leadership decided that the company’s time would be better spent working on generative AI instead of the car, the company told employees in an internal meeting on Tuesday. The company said some members of the Project Titan team would be reassigned to work on artificial intelligence.

In interviews on Wednesday with The New York Times, people who worked on the project praised the decision to shutter it and said the technology behind generative AI could be invaluable to the future of the company’s all-important iPhone business.

Apple’s dead car project will be survived by the underlying technologies. The company plans to apply what it has learned about artificial intelligence and automation to other technologies it is exploring, including AI-powered AirPods with cameras, robotic assistants and augmented reality, according to three people briefed on the projects.

While the engineers working on automation software will be working on artificial intelligence projects, others in the automotive team have been told they will have to apply for various positions at the company.

Cade Metz reporting contributed.

For years, Ben Black’s phone annoyed his family. It was the only Android device in a family messaging group that included eight iPhones. Thanks to him, videos and photos would arrive in low resolution and green text bubbles would appear between blue bubbles.

But a new app called Beeper Mini gave him the opportunity to change that.

The 25-year-old Mr. Black used the app to create an account for Apple’s messaging service, iMessage, with his Google Pixel phone number. For the first time, every message the family exchanged had a blue bubble and members could use perks like emojis and animations.

Since its introduction on December 5, Beeper Mini has quickly become a headache and potential antitrust problem for Apple. It has blown a hole in Apple’s messaging system, while critics say it has exposed how Apple bullies potential competitors.

Apple was surprised when Beeper Mini gave Android devices access to the Modern iPhone service. Less than a week after the launch of Beeper Mini, Apple blocked the app by changing the iMessage system. It was said that the app created a security and privacy risk.

Apple’s response set off a game of Whac-a-Mole, with Beeper Mini finding alternative ways to work and Apple finding new ways to block the app in response.

The match has raised questions in Washington about whether Apple has used its market dominance over iMessage to block competition and force consumers to spend more on iPhones than cheaper alternatives.

The Ministry of Justice has expressed interest in the case. Beeper Mini met with the department’s antitrust lawyers on Dec. 12, two people familiar with the meeting said. Eric Migicovsky, co-founder of the app’s parent company Beeper, declined to comment on the meeting, but the department is in the middle of a four-year-old investigation into Apple’s anticompetitive behavior.

The Federal Trade Commission said so a blog post Thursday that it would scrutinize “dominant” players who “use privacy and security as a justification for not allowing interoperability” between services. No companies were mentioned in the message.

The fight also caught the attention of the Senate Antitrust Subcommittee. The committee’s leadership — Senators Amy Klobuchar, Democrat of Minnesota, and Mike Lee, Republican of Utah — wrote a letter to the Justice Department expressing concern that Apple was eliminating competition.

Apple declined to comment on the letter.

The questions from Washington go to the heart of today’s smartphone competition. Rival smartphone makers are praising iMessage for helping Apple expand its smartphone market share in the United States to more than 50 percent of smartphones sold, up from 41 percent in 2018. according to Counterpoint Researcha technology company.

Messages have been a key part of Apple’s strategy to sell more iPhones. For years, it has made the exchange between iPhones and Android devices as fundamental as the texts between decades-old flip phones. Texts between iPhone users appear in blue and can be tapped to give a thumbs up, but texts from Android users appear in green and have no simple benefits.

Android companies have tried to fight back. An Android smartphone maker, Nothing, has collaborated with an app called Sunbird Offer iMessage. Google, who created the Android operating system, has put pressure on Apple to take this over a technology called rich communications services that would allow high-resolution video and images to be sent between competing smartphones.

But their efforts have not yielded much. Last month, Apple said it would adopt the technology in the coming year. The move means Android users will enjoy benefits like sharing higher-resolution videos, but will be stuck with the green bubbles for text messages, which have become stigmatized and associated with less wealth.

“Everyone is watching to see what kind of response Apple will have to Beeper Mini,” said Cory Doctorow, special advisor to the digital rights group Electronic Frontier Foundation, who wrote an article. book on interoperability about different technologies. “We can’t say how concerned they are internally, but their response could have a huge impact on the way messaging works.”

Protecting iMessage is a decade-old strategy at Apple. In 2013, Apple software chief Craig Federighi opposed making iMessage workable on competitor devices because it would “remove a barrier for iPhone families to give their kids Android phones,” according to emails released during the company’s court battle with Epic Games, the maker of Fortnite.

Apple CEO Tim Cook has resisted calls to change that position. He one iPhone owner told a conference last year that the solution to green text messaging was to buy iPhones for friends and relatives.

Beeper brought a different approach to messaging. Mr. Migicovsky founded the company in 2020 to build a single messaging app that could send text messages across multiple services, including WhatsApp and Signal.

Mr. Migicovsky managed to integrate most messaging services except iMessage. Unlike its peers, Apple didn’t offer a web app, making it difficult to connect to its service. The only way Beeper could integrate iMessage was to route messages through Mac computers and then to an iPhone. The process slowed down messages and made them less secure.

While Beeper struggled with iMessage, a teenager in Bethlehem, Pennsylvania, found an alternative solution. James McGill, a 16-year-old computer hobbyist, made it his personal goal to figure out how iMessage worked. He used software to decrypt his iMessages and determined that Apple was using its push notification system – the same system that provides news alerts – to send messages between devices.

“It wasn’t a stroke of genius,” said Mr. McGill, a junior at Saucon Valley High School. “It just bothered me for a long time.”

In June, Mr. McGill published his findings on GitHub, a software platform where programmers share code. When Mr. Migicovsky saw the message, he thought it might help Beeper solve his iMessage problem. He offered Mr. McGill a job paying $100 an hour, a significant increase from the high school student’s $11 an hour as a cashier at McDonald’s.

The job was more complicated than Mr. Migicovsky or Mr. McGill expected. Since the release of Beeper Mini this month, Apple has changed iMessage about three times, Migicovsky said.

Every change from Apple required an adjustment from Beeper. The latest solution involves routing registration information to Beeper Mini users via their personal Mac computers.

“To block it completely, they’re going to have to figure out a way to require an iPhone serial number,” Mr. McGill said. “Beeper will still come up with a solution.”

An Apple spokeswoman said it would continue updating iMessage because it could not verify that Beeper was keeping its messages encrypted. “These techniques posed significant risks to user security and privacy, including the potential for metadata exposure and enabling spam, spam and phishing attacks,” she said in a statement.

Mr Migicovsky disagrees. Instead of allowing Android customers to send encrypted messages to iPhone customers, he says, Apple is trying to force them to exchange unencrypted text messages. He posted Beeper’s software code on the Internet and encouraged Apple and cybersecurity experts to review it.

Matthew Green, an associate professor of computer science at Johns Hopkins University, said Apple had some legitimate security concerns and warned that a prolonged battle between the two companies could potentially introduce vulnerabilities that criminals could exploit.

“A world where Apple works with third-party customers in a supported way is a good world,” Mr. Green said. “A world where Beeper and Apple try to fight each other in an arms race is a bad world.”

In an effort to end the impasse, Mr. Migicovsky said, he emailed Mr. Cook, but the Apple chief did not respond.

“This was not our intention,” Mr. Migicovsky said. “We try to make it work, within our control, for the benefit of the chat world.”