NIXSolutions: Apple’s Tariff Policy Under EU Scrutiny

If in terms of hardware, European regulators forced Apple to switch to using a unified USB-C port to charge its mobile devices, then in terms of software, their demands extended to democratizing access for developers to the App Store and reducing fees. As it turns out, Apple’s new tariff policy still raises questions for EU authorities. In any case, as Bloomberg notes, as part of a new investigation, the European Commission is demanding clarification from Apple regarding the company’s “basic technology fee” of 50 euro cents for each copy of an installed application. This new tax must be paid to Apple by application developers who place their products in the App Store. EU regulators believe that such fees could become burdensome for application developers.

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At the same time, American tech giants are trying to find support from Donald Trump in an attempt to protect their commercial interests in the European Union. Local legislation has recently established gigantic turnover fines for violations of antitrust laws and data protection. The company has already had to open up its proprietary contactless payment system, which uses hardware solutions built into the iPhone, to third-party developers.

Investigations, Tariffs, and Potential Consequences

The European Commission is conducting a survey of app developers as part of a new stage of the investigation into the results of reforming Apple’s previous system of mutual settlements with software developers for the App Store. Apple has chosen to replace the earlier commissions—reaching 30% of the user’s payment to the developer—with a combination of a reduced commission rate and additional payments. The European Commission is trying to understand how Apple’s new tariff policy can affect software users’ costs, whether developers can easily survive the transition to the new payment system with Apple, and whether it really allows them to reduce their expenses on promoting their products, as the company claims.

If regulators conclude that the new system of commissions and payments for developers violates European legislation, Apple may be forced to re-examine its relationships with developers. In case of disobedience, Apple may be fined up to 10% of its annual revenue worldwide. Under Trump as US president, European authorities may find it harder to put pressure on American tech companies that are reluctant to give up their customs in order to comply with European law.

It remains to be seen how Apple will respond to these challenges, but the European Commission is determined to gather comprehensive feedback from relevant stakeholders to ensure compliance with its regulations, notes NIXSolutions. Developers, consumers, and analysts alike will be watching this situation closely to see whether Apple’s revised approach can indeed strike a fair balance between the company’s interests and those of third-party app creators. We’ll keep you updated as more information emerges on this evolving topic.