Apple-Funded Study on EU Alternative App Store Business Terms
The Analysis Group (MacRumors, Slashdot, Hacker News):
Despite commission rates typically falling by about 10 percentage points, current evidence shows that developers kept the prices of what they sold through the App Store the same or increased them more than 90% of the time.
[…]
Developers’ decision not to pass on commission savings to EU users mirrors Apple’s past experiences following the launch of multiple initiatives that reduced commission rates. For example, when Apple reduced commission rates for tens of thousands of small developers under the Small Business Program, developers decreased only a small minority of prices in the US storefront.
In addition to developers keeping most of the commission savings for themselves, the overwhelming majority of those savings—more than 86%—went to developers outside the EU.
I think the way this is framed is probably more revealing than the actual results. It seems to be using a straw man that the purpose of the DMA and the Small Business Program was to lower the prices paid by consumers. But the EU said that the DMA was meant to “make the digital sector fairer and more competitive,” and Apple said the Small Business Program was meant to “accelerate innovation and help propel your small business forward.” Now Apple is acting as though it and end users are the only parties that matter, so by implication the money must have been wasted. There’s no consideration that maybe these funds helped some developers stay in business or invest more in the products, both of which would be beneficial to the platform as a whole (including Apple).
To answer this question, this study compares the prices set by developers for digital products in EU App Store storefronts during the three months before they enrolled in the alternative business terms (the “before” period) with the prices they set during the three months after enrollment, when they benefited from decreased commission rates (the “after” period). This study focuses on the cohorts of developers who enrolled in the alternative business terms from March 2024 through September 2024.
[…]
The fact that the share of products with observed price decreases barely changed when looking at an extended after-period suggests that the small share of observed price decreases is not dependent on the length of the post-enrollment period observed.
I can see why they looked at what specific developers did after adopting the new terms, but they didn’t have a control group. I think that for a good study design you would want to compare with developers who didn’t switch to the alternative terms. Were their prices more or less likely to stay the same or increase? My impression is that software prices have overall increased over the last few years, so even staying the same would be a decrease relative to the market.
There’s also a section where they say this doesn’t have anything to do with the CTF. I guess their assumption is that these developers knew they would remain small and so would not be subject to the CTF in the future? My impression at the time was that this was all very confusing and subject to change, and everyone was worried about the looming CTF. I’m surprised that even 21,000 apps switched to the alternative terms.
The way the European Commission has generally framed the DMA is as a matter of consumer choices and reducing the distortions of a market within a market. More competition within these platforms and better interoperability between them, it is arguing here and elsewhere, can lower prices. Interpreting this sentence to mean “lower commissions and therefore lower app prices for consumers” seems to me like a stretch.
The study’s headline findings might sound negative, but it actually documents a modest increase in developer earnings[…] Against €403 million in sales, a €20 million reduction in commission is noteworthy. And even though most developers who benefitted are outside the E.U., many are probably small businesses[…] It is hard for me to believe Apple having €20 million less in its bank account is of comparable impact to that of a bunch of small developers having €20 million more to spend and invest.
Previously:
- App Store Study Shows 90% of What?
- EU App Store Tiers and Core Technology Commission
- Apple Tweaks New EU App Store Business Terms
- DMA Compliance: Alternative App Stores But No Sideloading
- App Store Small Business Program With 15% Fee
Update (2025-11-13): Kyle Howells:
In the US weirdly monopoly laws seem to be less about it being a monopoly and about the resulting price to consumers. Apple has won/lost a few times based seemly only on that.
So Apples response seems to be applying US monopoly law thinking (prices going down = good excluding all else) to EU law (more choice/user freedom, price secondary).
It’s either a misapplying US law in an EU context, or the study is designed less for the EU than for use in ongoing domestic cases in the US.
What’s scary about the mention of the Small Business Program, and the underlying tone of criticism, is the prospect that Apple might abolish it.
I don’t think Apple is legally required to continue it anymore, according to the terms of the settlement of Cameron, et al. v. Apple Inc.
This reminds me that when the Mac App Store was first introduced, there was some talk about whether developers would charge more in the store because Apple’s commission was higher (e.g. double to triple eSellerate’s). This pretty much never happened. They let Apple take more, without passing the expense on to customers.
Update (2025-12-09): John Gruber:
Tiimo, a to-do app that Apple just named as the iPhone app of the year in the 2025 App Awards, charges about 20 percent less for subscriptions on its website compared to its in-app subscriptions. An Apple-funded, Apple-promoted study showing that the App Store’s commissions don’t raise prices ought to be taken with a few grains of salt.
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Maybe Apple is taking a lesson from when they were found guilty in the US District Court of masterminding a price-fixing cartel to distort the market for eBooks, and have seen the light on the necessity to lower consumer price.... bwahahahah, sorry, couldn't keep going.
Bootlicking fasc-tech company speaks lies, news at 11.
It's funny that they are trying to spin "small developers made more money" into a negative. Like we'd all be much better off if Apple had made that money instead.
I love how openly craven they are. The section titled "How else are we supposed to pay for the lumps of gold we need to place on world leaders desks" is amazing!
Apple is greedy, corporations are, this is not a surprise. The fact is that EU laws are supposed to be made for the sake of EU people and EU commission has in fact justified DMA law saying that it was made to lower software prices for EU people. Apple study demonstrates the law is ineffective so it is only burocracy that harms EU people keeping them out of latest features and innovations.
If EU laws would have been made to give more money to developers it would have been effective but also against free market, Apple intent here is to demonstrate that DMA has been made to satisfy lobbies of EU software houses and not for the sake of EU people and they show just that.
@Dabemo The DMA doesn't keep features away from European consumers, any more than the GPDR forces people to deal with cookie warnings.
*Apple* keeps features away from European consumers, by holding them back as a bargaining chip, to strong arm the local populace into rising up against their government to do what Apple wants. That is the methodology of the terrorist - attack the civilian population until they demand their own government cave to the terrorist's demands.
And, *Advertisers* force people to deal with cookie banners, by not following the privacy requirements of the GPDR.
This is what the EU said that *some* off the effects of the DMA might be
"Consumers will have more and better services to choose from, more opportunities to switch their provider if they wish so, direct access to services, and fairer prices."
And if Apple wasn't such a greed-first driven company this would have been the case. Now it will take a decade of legal wrangling.
@Someone "*Apple* keeps features away from European consumers... terrorist..."
That's a fairy tail, I don't want to defend Apple nor I care about Apple, but reality is a different place. When EU imposes interoperability, Apple, to obey, must release proprietary technology to competitors, to avoid it Apple must refrain from introducing the technology in Europe.
Apple has all interest to satisfy European customers, it is a very profitable market, if it does not and stop something to come to Europe (absorbing the higher cost to maintain different standards and products for Europe) it is not for Apple is the villain of the fairy tail but because it is forced to do so to avoid the higher cost of sharing its technology.
EU is not the good guy either, a good law affirm principles in a debatable environment, by inserting technical constrains in a law EU legislators not only wants to affirm principles but also they act as expert engineers and impose how to do things to respect those principles, and unfortunately legislators are not computer scientists, lobbyist are and they mock the legislators. This is wrong in so many ways and cause real damage, like the windows failure for a bug in an antivirus software accessing the kernel (consequence of an EU law with technical constraints) or when people died in electrical failures due to a law containing technical wrong prescriptions about how to do safe electric implants etc.. etc..)
US monopoly laws used to not be about ‘cost to consumer’ — that’s a more recent (1980s) neoliberal economic policy/excuse… that consumer price is the ultimate goal/proxy for competition (thus allowing fewer competitors in a market — see all the mergers of the past decades like TV, cell phone companies, etc. which always leads to prices going up, not down, but let’s not let facts distract us from neoliberal econ ideology)
Some people here may recognize a name involved in this: Justice Bork.
> They let Apple take more, without passing the expense on to customers
For one-time purchases, that's true, but I think prices were raised in the form of subscriptions creating an era of rented software. Apple forced rented software to happen because they wanted repeated 15-30% cuts. Yet they continue to ignore App Upgrades which would give them that and allow license ownership.
If Mac Devs priced App Store products the way Apple prices products:
+ 15-30% to cover Apple's cut
+ 15% for dealing with App Review insanity
+ 15% for dealing with sandboxing insanity
+ 15% for dealing with Xcode insanity (esp around OS releases)
+ 15% for dealing with cert nonsense
+ 15% for dealing with the dumbest accounting of any payment processor
+ 15-30% for not owning the customer relationship
+ 15-30% opportunity cost
I estimate Mac App Store license prices should be +120% to +165% the price in your company store. Apple's taken margin *and* time and sanity (worth much more) for 14 years. We've eaten the Apple Tariff for customers far too long.
@Someone...you might want to actually look back at that eBook case to see that it wasn't at all what you're trying to portray. Has nothing to do with now.
@JK actually it is exactly as I've depicted it. I've written on it many times, including in submissions to my own government's competition policy reviews, and those submissions are included in the public records of those reviews.
Apple was a ringleader in a conspiracy to fix the price of eBooks, by arranging with publishers to form a cartel which would only allow agency pricing, such that Amazon would be prevented from offering eBooks as loss-leaders, preventing consumers from receiving the lower prices that would result.
Apple had every level of appeal, and they lost every time, because they were guilty.
In the Apple fanboy world, Apple's criminality is hand-waved away because Amazon was a bigger player, the dominant player in eBooks, but being a monopoly is not inherently a criminal act. *Using* your monopoly to maintain or extend a monopoly *is* (which is what Microsoft was charged with under the Sherman Antitrust Act), and in Apple's case it doesn't matter how big or dominant the opponent, or how righteous the cause may seem; collusion across an industry to fix prices is a crime.
Apple was guilty of that, just like they were guilty of illegal agreements to not hire staff who'd left their competitors as part of an illegal anti-poaching pact, just like they're guilty of many things, because fundamentally they have always acted like the law doesn't apply to them.
@Dabemo Apple *chose* to design its systems the way it did. If allowing, for example, a third party smart watch the same access to an iPhone that an Apple watch has requires compromising the security of an Apple technology, or "giving away" a proprietary Apple technology, that is an Apple problem. That is a failure of Apple's architectural design.
There is no reason for software, or computing to be subject to any less regulation than architecture. Every aspect of a building is regulated, and designers of doors, door handles, staircases etc are all dictated to as to the constraints within which they must design buildings, and Architecture as a discipline doesn't seem to have suffered for that.
Practitioners in a field are frequently not the best people to decide how their industry should go about doing things, because their goal is the best outcome for themselves. Elected representatives *should* dictate product design standards to companies, because they are literally invested with that power by their citizenry.
Companies have the *privilege* of operating within a society, not the *right*, and that privilege is dependent on them following the rules that society sets for their conduct. Europe is not America, something that Apple, and its fans keep filing to understand.
Now obviously, the larger solution is the fundamental regulation of interconnection, so that Apple (for example) is required to only use the same methods they make available to third parties when Apple products and services interact with each other. No more private APIs, no more exclusionary vertical and horizontal integration, etc. All dogfood, all the time. But that would require Apple's products and services to compete on their own merits, feature-for-feature, and if there is one thing central to Apple's corporate psychology, it is cowardice in the face of competition.
