Apple is one of the few tech companies that have created an ecosystem that users find difficult to leave. App developers too face a similar situation, even as they lose a significant portion of their profits to Apple. This is due to the commissions charged on each in-app purchase.
However, this situation may soon change with the the European Union’s Digital Markets Act (DMA) for gatekeepers of online services kicking in force on 7 March 2024. This act aims to reduce the dominance of certain services in the digital sector, promoting a more competitive environment where the strongest players do not always come out on top. These gatekeepers include Apple, Microsoft, ByteDance amongst others.
This also means that Apple may be forced to allow app developers to redirect in-app purchases to external payment platforms that charge a lower commission rate or to their own developer website to complete a purchase. The change could potentially resulted in losses amounting millions for Apple.
Apple may have something up its sleeve
According to Mark Gurman from Bloomberg, Apple may be planning to split its App Store into two versions: one for the European audience and another for the rest of the world. The specifics of how this will work are still unknown, but we can expect to find out soon.
To prevent significant revenue loss from in-app purchases in the European Union, Apple will undoubtedly be devising a strategy to recover its losses.
The question remains: how much will be recovered and in what manner?
