Looking to save oodles of money, Apple awaits major decision from EC

App developers wanted the freedom to send customers to third-party processing platforms

One of the main conditions that developers wanted was the freedom to redirect their customers looking to make a payment for an App Store purchase to a third-party processing platform, bypassing Apple’s fees. Under the new fee structure, developers who send customers to a third party to process an App Store transaction will pay a fee between 5% and 15%. There will also be no limits on the number of links developers can send their customers that will take them to a non-Apple processing platform.

Netflix was one of the loudest critics of the so-called Apple Tax. | Image credit-PhoneArena

Back in April, Apple was fined €500 million ($587 million) for violating the Digital Markets Act (DMA). The latter is the groundbreaking EU legislation designed to keep competition among tech firms fair in the union of 27 European states. After the fine was announced, Apple blamed the issue on technical problems that it said prevented app developers from sending customers to cheaper prices outside of the App Store. As a result, Apple had committed a DMA violation despite the excuses mentioned by the tech giant.

Apple appealed the fine this month, but at the same time, it said that the changes to the App Store’s processing fees it announced in June were done to prevent the tech giant from getting hit with punitive daily fines. After Apple was fined in April, the EC, charged with enforcing EU law, gave Apple 60 days to comply with the DMA or face daily fines of up to five per cent of its global revenue, which is equivalent to approximately €50 million per day ($58.5 million).

Spotify’s CEO Daniel Ek was one of the App Store’s loudest critics in the EU

Other firms fighting back against the Apple Tax included Netflix. In 2018, the video streamer stopped allowing new or re-joining subscribers to open their Netflix accounts via the App Store. In 2024, Netflix stopped allowing grandfathered subscribers to pay their monthly subscription charge through the App Store. Instead, Netflix subscribers had to agree to make direct payments to Netflix to keep their subscriptions. Netflix was trying to eliminate any subscribers who were still making their subscription payments through Apple.

While you can say that the force of legislation and the possibility of huge fines led Apple to make changes to how and how much developers are charged to process App Store purchases and subscriptions, companies like Spotify and Netflix were also instrumental in forcing Apple to make some of the changes they wanted.