The DMA put app distribution terms under examination
The DMA opened new distribution options for developers while bringing platform terms under regulatory scrutiny. Fees, customer journeys and implementation details would determine their commercial value.
An app developer considering a new European distribution channel faced both a platform's commercial terms and the European Commission's account of what the Digital Markets Act required. The terms described how the developer could operate. The law and its enforcement would determine whether the gatekeeper's implementation met its obligations.
On 25 March 2024, the Commission opened five non-compliance investigations involving Alphabet, Apple and Meta. For app businesses, the immediate questions included the ability to direct customers to offers outside an app store and the practical freedom to choose another browser. These were investigations into suspected shortcomings, with no final infringement findings announced that day.
Apple's new terms needed a commercial assessment
Apple's 25 January announcement described new EU options for alternative app marketplaces, payment processing and browser engines. Developers could choose new business terms or remain on the existing terms, with alternative distribution and alternative payment processing tied to the new terms. Apple also announced app notarisation, marketplace authorisation and user disclosures. Apple had described its proposed implementation and safeguards; regulatory compliance remained to be assessed.
- 25 January 2024
Apple announces EU changes
Alternative distribution and payment options are described alongside new business terms and safeguards.
- 7 March 2024
The first six gatekeepers reach their deadline
The designated companies must comply with the obligations applicable to their designated services and submit compliance information.
- 25 March 2024
The Commission opens investigations
Formal proceedings examine five suspected areas of non-compliance; separate fact gathering includes Apple's fees for alternative stores.
Platform announcements, compliance obligations and investigations each carried different legal weight. Opening proceedings did not establish an infringement.
The announcement showed why a new permission could require a detailed economic model. Under the proposed iOS terms, Apple set out reduced commissions, an additional charge for its payment processing and a Core Technology Fee of €0.50 for each first annual install above a one million threshold. Those charging bases differed. A business earning little revenue per installation could experience them differently from a subscription service with fewer customers spending more. This was the initial fee schedule; later terms and exceptions could change the calculation.
| Period or category | % of transactions for digital goods and services |
|---|---|
| Lower commission category | |
| Other commission category |
Apple's January 2024 EU iOS announcement set out 10% commission for the vast majority of developers and subscriptions after their first year, and 17% otherwise. Apple's payment processing added 3 percentage points, while the separate Core Technology Fee was based on installations. The figures describe announced commissions, not total costs or later revisions to the terms.
Source1
Gatekeepers had to demonstrate effective compliance
The first six designated companies were Apple, Alphabet, Meta, Amazon, Microsoft and ByteDance. On 7 March 2024, the Commission said they had to comply fully with their DMA obligations. Gatekeepers were required to explain their measures in compliance reports, while the Commission would examine their effectiveness and take input from interested parties. For a developer, an announced option was therefore something to test against a real transaction or installation journey.
Three routes needed separate evaluation. Alternative distribution concerned how an app reached a device. Steering concerned how a developer communicated an offer and concluded a purchase outside a gatekeeper's store. Default choice concerned which service a user encountered or selected. Success in one route did not establish success in another. A customer could install an app but abandon an external checkout; a browser could appear on a choice screen but fail to retain users. The operational evidence lay in completed journeys and subsequent use, with geography and software version recorded.
Formal proceedings and further inquiries followed different tracks
The Commission opened formal proceedings into Alphabet's Google Play steering rules and Apple's App Store steering rules. It described Article 5(4) as requiring developers to be able to steer consumers to offers outside the gatekeeper's store free of charge. Its concerns included restrictions on communicating and promoting offers, concluding contracts and charges that might constrain those activities. Separate proceedings examined Google's treatment of its own search services, Apple's measures for user choice and Meta's pay-or-consent model.
Apple's new fee structure for alternative app stores and web distribution occupied a different procedural position. The Commission announced additional investigatory steps to gather facts about whether those arrangements defeated the purpose of Article 6(4). It did not describe that fee inquiry as one of the five formal non-compliance proceedings opened that day. This distinction mattered to commercial forecasts: a developer could anticipate scrutiny without assuming that a specific charge had already been prohibited. The Commission intended to conclude the proceedings within twelve months; that intention was not a guaranteed decision date or outcome.
A new channel had to carry the whole customer relationship
For startups, the potential benefit was greater control over acquisition, purchasing and the continuing customer relationship. Realising it required accounting for payment processing, fraud management, refunds, subscription administration and support. Apple said it could not issue refunds for transactions using alternative payment processing. A developer adopting that route would need a clear way for customers to obtain help, with transaction records that could be reconciled across the app and external payment service.
A distribution business also needed a reason for users to seek it out. Permission to operate a marketplace did not supply a trusted brand, a compelling catalogue or an economical acquisition channel. Conversely, a specialised developer with an existing audience might have a stronger reason to direct customers to its own purchasing relationship. The investment case depended on the particular product, its audience and the cost of serving them.
Developers could compare the available terms, test the actual journey and allow for implementation changes as enforcement developed. The commercial advantage would emerge through retained customers and sustainable margins, which an investigation alone could not deliver.
Investment implications
- Alternative distribution, external purchasing and default choice affected different parts of the customer journey.
- The investigations examined suspected breaches; they had yet to produce final infringement findings.
- A developer's expected margin depended on the complete distribution and support arrangement, including any applicable platform fees.
Sources
- Apple announces changes to iOS, Safari, and the App Store in the European Union (opens in a new tab)
Apple
- Designated gatekeepers must now comply with all obligations under the Digital Markets Act (opens in a new tab)
European Commission
- Commission opens non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act (opens in a new tab)
European Commission
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