Why Apple is revamping its App Store terms in the European Union

Apple has revamped its app store policies in the European Union with hopes of fending off escalating fines under the 27-nation bloc’s digital competition regulations.

It’s a last-minute bid by the iPhone maker to avoid further charges following a 500 million euro ($585 million) penalty in April. The bloc’s executive Commission punished Apple for preventing app makers from pointing users to cheaper options outside its App Store, and gave it a 60-day deadline, which expired Thursday, to avoid additional, periodic fines.

The changes made by Apple will make it easier for app makers to point users to better deals on digital products and options to pay for them outside of Apple’s own App Store, including other websites, apps or alternative app stores.

The California company is also rolling out a two-tier system of fees to accommodate app developers that want to use alternative payments.

“The European Commission is requiring Apple to make a series of additional changes to the App Store,” Apple said in a statement. “We disagree with this outcome and plan to appeal.”

The commission noted Apple’s announcement and “will now assess these new business terms for DMA compliance,” referring to the EU’s Digital Markets Act. The rulebook was designed to rein in the power of big tech companies under threat of hefty fines worth up to 10% of a company’s global annual revenue.

Among the DMA’s provisions are requirements that developers inform customers of cheaper purchasing options, and direct them to those offers.

Apple’s restrictions preventing developers from steering users to outside payment channels had been fiercely opposed by some companies. It’s the reason, for example, Spotify removed the in-app payment option to avoid having to pay a commission of up to 30% on digital subscriptions bought through iOS.

—Associated Press

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