Apple's "Tax" Drops to 17% with EU Exclusive Version

The EU is really not coddling Apple.

Recently, Apple announced on its official website that, in compliance with the EU's Digital Markets Act (DMA), it will allow EU users to download apps through third parties and reduce the app store commission rate from 30% to 17%.

This reform will take effect in March, at which time a "special edition" App Store will be launched in the EU region, while other regions will remain unchanged.

Many people should still remember that the reason why the entire iPhone 15 series was equipped with USB-C ports was precisely because the EU introduced antitrust regulations, directly swinging an "iron hammer" onto Apple's head.

Now the familiar scene is played again, and the always arrogant Apple company finally chose to submit, and Cook once again lowered his noble head.

"Apple Tax"

Many people may know that in fact, every Apple user is paying an invisible "Apple Tax."

That is, Apple will charge a commission on all digital content consumption on the App Store, and the current rate is 30%.

For example, if we recharge to buy game props in the game, if we recharge 100 yuan with an Android phone, we will get 100 yuan worth of game currency; but if you recharge with an Apple phone, you can only get 70 yuan worth of game currency, and the remaining 30 yuan is put into Apple's pocket, which is called "Apple Tax."

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For a long time, Apple has excluded third-party applications in the name of security, but this closed ecosystem has actually formed a de facto monopoly:Software developers who wish to list their apps on the Apple Store must accept the "Apple tax," with no other options available.

This 30% Apple tax has long been a critical source of revenue for Apple's software services business. According to calculations by UBS Group, the App Store contributes a quarter of the revenue to Apple's services business.

Based on Apple's performance in the fourth quarter of the fiscal year 2023, which was announced in November last year, the revenue from the "Apple tax" reached as high as $5 billion.

However, facing the "hammer" raised by the EU, Cook eventually compromised.

According to the announcement released by Apple this time, the new adjustments will be implemented starting from iOS 17.4, which will be announced in March. EU users will be able to install apps through third-party app stores.

But Cook, who has always been "sly and cunning," is clearly not an easy person to deal with. Although he did indeed open up the relevant permissions to the EU this time, he also made some new regulations.

For example, companies planning to launch third-party app stores in the EU must provide Apple with a credit certificate of 1 million euros issued by an A-class financial company;

Furthermore, a new concept called the "core technology usage fee" has been proposed. Even if apps are downloaded from third-party app stores, as long as the annual first-time installation volume exceeds 1 million times, developers are required to pay Apple 0.5 euros for each subsequent first-time installation.

For instance, if a developer lists an app on a third-party app store and the annual installation volume reaches 5 million times, the first 1 million installations are free, and the remaining 4 million installations will require the developer to pay Apple 2 million euros.

Moreover, if the app offers in-app purchases, Apple will also take a 10% or 17% commission from it.So to a certain extent, the "Apple tax" has not truly disappeared; it has indeed been reduced but still exists in another form, highlighting Apple's boundless greed.

Why the European Union?

At this point, many people might be wondering:

Why does the European Union always "come down hard" on Apple? Is it "targeting" them?

Logically speaking, there are no direct competitors of Apple within the European Union. In today's global smartphone industry, aside from Apple and Samsung, the rest are almost entirely dominated by Chinese phones.

So there is clearly no deliberate targeting; ultimately, it's because Apple has gone too far.

As a technology company, it's understandable to create one's own ecosystem advantages, but if to maintain such advantages, one engages in monopolistic practices to seek huge profits, disrupting fair competition in the market, it is obviously not permissible.

For example, Apple used to use its own encrypted data cables, which were officially priced at over 100 yuan, while a universal ordinary type-C data cable costs only about 10 yuan, a tenfold price difference.

Just the accessories business alone can bring Apple billions of dollars in profit each year, and this money is what consumers are paying for Apple's monopoly.

So from an antitrust perspective, there is nothing wrong with the European Union's approach, and ultimately, it is the consumers who benefit.On the other hand, in response to Apple's monopoly, many countries have actually imposed relevant penalties, it's just that the EU's approach appears more aggressive and thus garners higher attention.

For instance, Brazil once fined Apple 140 million yuan for canceling the delivery of chargers. To comply with China's regulations on network data security, Apple was forced to hand over the operation of its iCloud cloud services to a Chinese company.

Including this time when the EU demanded that Apple open up sideloading, Japan and the United States are also considering similar legislation to make corresponding provisions.

It can be said that the world has long suffered from Apple's monopoly, and everyone has unanimously turned their sights on Apple.

Will China abolish the "Apple tax"?

The most concerning issue for everyone now should be whether China will follow the EU's example and reduce or directly abolish the "Apple tax" next.

Although at present, opening up app sideloading and reducing the Apple tax cut is only limited to the European region, it is very likely that this trend will sweep across the globe in the future.

There are mainly two reasons. First, there are already "precedents" for related cases:

Previously, the EU legislated to unify charging interfaces, and Apple had refused multiple times, leading to a "tug of war" between the two. But in the end, it was still "the arm couldn't twist the thigh," and Apple was forced to submit.

It started with Europe, then it was aimed at the global market, and finally, the iPhone 15 series was equipped with a Type-C interface across the board.So it's not impossible for the current script to be similar, where Apple extends the strategy it is currently implementing in the EU to the global stage.

Secondly, the saying "it's not the scarcity but the inequality that is worrisome" applies here. If Apple were to practice discrimination, it could likely provoke public outrage.

If Apple were to abolish the "Apple tax" only in Europe, it would almost be like openly telling consumers in other markets that they are targeting the "honest people." One can imagine what the consequences would be.

When faced with the surging tide of public opinion, even a proud company like Apple would find it hard not to bow down, after all, making money is not a shameful thing. If they do not yield, they could very likely lose a large number of users.

Therefore, the EU has set a good precedent for the global market. Whether the "Apple tax" will be reduced in the global market in the future, or even truly abolished in substance, let's all wait and see.