Study: DMA brings no cheaper app prices for users

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The regulations of the Digital Markets Act (DMA), which are intended to ensure more competition in app stores, among other things, apparently have only one winner: the developers. According to a new study, they have pocketed the lower fees they have to pay to Apple in the EU. However, users have seen little to no savings. And the increase in developers' coffers is not even boosting the EU economy: 86 percent of the beneficiaries are located outside the European Union, according to the study.

The study, which was supported by Apple, concludes that the lower commissions that developers have to pay in the European Union since the introduction of alternative terms and conditions under the DMA have not led to lower prices for consumers. In over 90 percent of cases, developers kept app prices the same or even increased them. This was observed independently of the controversial core technology fee, which only applies to very successful apps anyway.

Apple: DMA has not met expectations

In light of the results, Apple sees itself confirmed that the DMA has not met the expectations placed on it. In a statement, the California-based iPhone manufacturer reiterated its criticism that consumers in Europe have instead received less security, less data protection, and a worse user experience. “This study provides further evidence that the DMA does not enable consumers to benefit from lower prices. At the same time, we know that the law creates new obstacles for innovators and start-ups and exposes consumers to new risks.”

The study, conducted by Analysis Group, an economic consulting firm based in North America, analyzed more than 41 million transactions from around 21,000 apps and in-app purchases in the EU app stores. The period examined was the three months before and after the introduction of the alternative terms and conditions between March and September 2024. Apple had to introduce the new conditions due to the DMA's requirements.

Developers saved 20.1 million euros

Even the price reductions, which were observed in just under 10 percent of cases, are not attributed to the DMA by the study. These correspond to observed patterns that existed before the DMA. This also aligns with Apple's experience. Initiatives such as the Small Business Program, which provides for lower fees for developers with low revenue, also did not lead to price reductions for apps.

The alternative terms and conditions introduced by Apple in March 2024 are available to developers as an option alongside the existing ones. According to Apple, thousands of developers have chosen them. Developers who opt for them pay reduced commissions: instead of 30 percent, 20 percent is due (17 percent for App Store services plus 3 percent for the in-app payment system). For certain developer categories, the rate drops from 15 to 13 percent. In addition, a Core Technology Fee of 0.50 euros is charged for each first installation per year—but only from one million downloads per app.

The study shows that developers saved approximately 20.1 million euros through the reduced commissions in the three months following the introduction of the new conditions. However, they did not pass these savings on to their customers. This is particularly evident with the five highest-grossing developers in EU app stores: all kept the prices of their most popular products unchanged, including dating apps, social networks, and games. An example from the study: a dating app subscription cost 11.76 euros before the commission change. Although the commission decreased from 3.53 to 2.35 euros, the price for users remained the same.

iPhone mirroring still not in sight in the EU

For Apple, the study's findings are further evidence that the DMA has negative consequences. The company also criticizes that the law creates new barriers for innovators and start-ups and exposes consumers to new risks. The company cites the delayed introduction of features in Europe, such as iPhone mirroring, and security concerns regarding the law's interoperability requirements as examples. In the case of iPhone mirroring to the Mac, Apple developers have so far not found a secure way to enable the function on non-Apple devices, but this is a prerequisite for bringing the function to the EU.

In earlier statements, an EU Commission spokesperson had rejected Apple's criticism of the DMA and stated that the law aims to offer consumers more choice and enable fair competition for European companies. Whether alternative app stores, so-called marketplaces, have led to cheaper apps for consumers was not investigated by the study.

(mki)