New EU rules may force change in how Apple promotes own apps in App Store

Apple and other tech giants may have to alter how they promote their own apps on platforms they control, with the EU competition head hinting at rule changes that could be revealed before the end of 2020.

The European Union is working on updating the Digital Services Act, a set of rules dictating how platforms like the App Store are protected, as well as governed. As part of the reformation effort, which could include alterations to how content is handled, there could be rules that advise how platform owners present services they also operate.

European Commissioner for Competition Margrethe Vestager told CNBC on Friday that changes will include elements concerning self-preferencing. "With power, with strength comes responsibility and part of that is, for instance, that you don't promote yourself when your services (are) in competition with other services," Vestager suggested.

For Apple, the rules would limit how it would promote its own apps and services through its storefronts, such as the App Store. For example, Apple may be prevented from actively promoting Apple Music as a service it offers ahead of rivals like Spotify.

According to Vestager, the exercise isn't really to do with the size of the platforms, more attempting to make sure there's fair competition. "That is the point, that if you have grown into this size that you actually do exercise control on yourself and that you enable other people to their business in a way that is fair and square," the competition chief added.

Apple is already under investigation by the European Commission, with probes looking into its Apple Pay and App Store activities.

The new legislation from the European Union and regulator the European Commission is anticipated to be presented to the European Parliament before the end of the year, potentially on December 9, but it will take time for it to be ratified by EU countries if the parliament agrees to the measures.

As well as competition, the regulatory refurbishment also covers areas including handling misinformation and deceitful content, the potential sharing of customer data with smaller rivals, and digital taxation, among other topics.

Apple and other major companies potentially affected by the rules were invited to discuss the proposals with the European Union in November. At the time, it was believed the session would not be particularly consequential, as the draft rules have largely been finalized, and were unlikely to undergo major edits at this late stage.

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28 Comments

genovelle 16 Years · 1481 comments

About 4 years ago

Sounds to me like it would encourage me to keep my platform to myself and limit my tools to myself to ensure my success doesn’t lead to my failure.

larryjw 9 Years · 1036 comments

Does Apple really compete with others?

Okay, they have their iWork products like Pages, Numbers, Keynote, GarageBand. But they're up against Microsoft in this category, and MS wins in the completeness category. I use the Apple products for relatively routine and unsophisticated tasks, but any interaction with others means I need to use Word, and sometimes Google's products.

But, really now, Apple's products at best compete with Windows products.

EsquireCats 8 Years · 1268 comments

larryjw said:

Does Apple really compete with others?

Okay, they have their iWork products like Pages, Numbers, Keynote, GarageBand. But they're up against Microsoft in this category, and MS wins in the completeness category. I use the Apple products for relatively routine and unsophisticated tasks, but any interaction with others means I need to use Word, and sometimes Google's products.

But, really now, Apple's products at best compete with Windows products.

It's an interesting thought. I don't think any consumer is indecently led or limited into using Apple's products. For example if we do a search for "Spotify" on the app store, you'll see first an ad (usually for TikTok), then Spotify in top ranked position, and the various music competitors (Youtube etc.) then finally after scrolling to the bottom, you'll see Apple Music. If searching "Music" you'll get Apple Music first, but keep in mind that's the name of the service, so this result is hardly surprising.

User's generally mix and match their software to meet their preferences, or, if users of Apple products are choosing to complement their Apple device with other Apple services, this is also not extraordinary. Customers often buy new products from brands for which they have prior experience. Secondly Apple offer a level of integration in their services that companies like Spotify are either slow or simply refuse to offer. Pandora and iHeartRadio are both very fast at implementing new playback features, such as Apple Watch and CarPlay support.

Then there is a question of new complementary products. Should the HomePod have launched with tie-ins to all 3rd party music platforms - even though this would require the 3rd party to perform additional unpaid work, expose Apple's trade secrets and potentially delay their own entry into the market, and what if they refuse, should the launch be cancelled because a 3rd party refuses to join?

This whole argument seems moot - Spotify enjoys a significantly larger market share than Apple Music, and a mere 0.5% of Spotify's customers on iOS use the in-app payment feature. Since Spotify hasn't offered IAP for new users in years, that 0.5% are all at the 15% rate. That sounds like a pretty good deal for Spotify.

sflocal 16 Years · 6138 comments

I'm still at a loss that a government can tell a company what they can and can't do with their widget. This is not Microsoft of the 90's-2000's where it was using it's Windows dominance to force hardware manufacturers to its will. This is Apple's software and hardware. The entire beginning and ending point. App developers are essentially tenants leasing space on Apple's widget to sell its wares - just like supermarkets - and that lease is paid for by its 30% (or 15%) cut of sales, exactly like supermarkets and many commercial establishments.

I'm an app developer too and I'm just embarrassed and the level of entitlement that many App developers show. It's as if they deserve to take a free ride on the work of another company. Apple does all the work in creating new products that countless consumers love, and work hard to get those consumers to continue spending money on that ecosystem, maintaining that ecosystem with data centers, distribution, paying employees to keep it all running, etc... and then do it all again for the next iDevice.

I'm sure there will be an agreement somewhere, but in the end, if I have a widget, I would have no problem telling whatever government to go f**k themselves when they're expecting me to giver preference to a competitor, than to my own products/services on my own products! I would immediately rid Spotify and Epic and ban them from the App Store forever. If management/founders of those companies go to start another company to get back into the App Store, I'd ban them too. I'd make it so that no company would want to do business with these people.

rob53 13 Years · 3313 comments

Is this going to affect any EU companies or only US ones? If the latter, then what happened to EU companies? Is the US the only country that provides these services?