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Dow Jones NewsJun 27, 6:42 PM UTC
DJ Apple and Meta Could Face Daily EU Fines Starting Next Week -- Barrons.com
By Adam Levine
Faced with the prospect of more fines in the European Union related to its App Store, Apple has made significant and complex changes to its terms of service in the EU.
The changes mean that Apple is likely to see less revenue from its EU App Store for iPhone and iPad, which accounts for about 7% of Apple's App Store revenue.
The move is in response to a fine of 500 million euros that Apple received for noncompliance with the EU's Digital Markets Act, which regulates large companies that operate digital marketplaces. Apple had until Friday to make these changes, and the Thursday changes are intended to avoid daily files of around EUR50 million, or 5% of its average daily revenue.
"The European Commission is requiring Apple to make a series of additional changes to the App Store," Apple told Barron's in a statement. "We disagree with this outcome and plan to appeal."
The next move is from the EU's executive body, the European Commission. At a meeting on June 30 it will poll users and developers like Sweden's Spotify about the changes, and decide whether they meet the DMA's stringent requirements. If not, the daily fine could be triggered.
Under Apple's new proposal, developers will have a new set of choices, and additional operational requirements if they opt out of Apple's distribution model. Apple is offering a 30 minute support session to developers so that they can understand the best option for them.
The changes add layers of complexity to App Store commissions, with Apple taking a mix of 2%, 3%, 5%, 10%, and 13% fees depending on the choices developers make.
Ultimately, app developers will be able to sell anywhere outside of Apple's market and they will avoid the highest fees, which previously went up to 30%.
But developers using the App Store will still have to pay something to Apple, and those choosing outside marketplaces will lose many Apple services like fraud-detection, refunds, tax calculations, as well as integrated iCloud features like sharing apps within a family and parental controls over app installs.
Developers aren't necessarily happy with their new choices. Tim Sweeney, CEO of Fortnite-maker Epic Games, who has been battling Apple on this issue for years, criticized the new rules on Thursday.
"Apple's new Digital Markets Act malicious compliance scheme is blatantly unlawful in both Europe and the United States and makes a mockery of fair competition in digital markets," he wrote on X, formerly Twitter. "Apps with competing payments are not only taxed but commercially crippled in the App Store."
Meta Platforms also had a Friday deadline for compliance, and is also facing potential daily fines. The social media firm was fined EUR200 million by the EU in April for DMA violations tied to advertising-related privacy issues in its apps.
The company has offered to reduce tracking for its EU users and has also offered a paid tier with no advertising.
The EC is unlikely to be satisfied with the remedies. It has repeatedly said that users should be offered a free advertising-based service with no tracking or surveillance attached, and that Meta must obtain consent for tracking.
The EC will be taking comments in a meeting about Meta's compliance on July 3, after which the daily fine could come into effect.
If the EC doesn't sign off on its remedies, Meta could face daily fines of about EUR25 million as soon as July 4, or 5% of its annual income if applied for the full year.
"The European Commission continues to discriminate against an American company's business model that is linked to EUR213 billion in economic activity and supports 1.44 million jobs across the EU," a Meta spokesperson told Barron's. "Nonetheless, we have engaged constructively with the European Commission and introduced extensive changes to address its ever-changing feedback as it continues to move the goal posts. We are confident that the range of choices we offer people in the EU doesn't just comply with what the EU's rules require -- it goes well beyond them. "
Write to Adam Levine at [email protected]
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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June 27, 2025 14:42 ET (18:42 GMT)
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