Apple-Funded Study Finds DMA-Motivated Changes Save Developers Over €20 Million in Commission Fees in Three Months ⇥ macrumors.com

Juli Clover, MacRumors, reports on a new study from Apple’s best professional friends:

Apple today shared a study commissioned from Analysis Group [PDF] that looks at App Store pricing changes before and after reduced fees took effect in the EU in March 2024 under the Digital Markets Act (DMA). The report shows that the DMA has not resulted in lower prices for consumers.

This study has not yet appeared on Apple’s Newsroom page or its Developer site. Per its recent strategy, it circulated the PDF to Reuters plus publications like AppleInsider who framed it in company-friendly terms. Ben Lovejoy, of 9to5Mac, for example, received an advance copy of the report:

The EU argued that having competing app stores would result in lower commissions and therefore lower app prices for consumers. However, an Apple-funded study carried out by The Analysis Group says it checked for reductions in app prices after commissions were reduced and says it can find very little evidence of this.

That link points to a 404 error, and not because a page never existed there, but because it was pulled offline in the last month. The version most recently saved in the Wayback Machine, from October 10, says the DMA’s rules would result in “fairer prices” for consumers, though that is in the context of a longer bullet point about competition generally:

Consumers will have more and better services to choose from, more opportunities to switch their provider if they wish so, direct access to services, and fairer prices.

This is the only mention of pricing on the page. The way the European Commission has generally framed the DMA is as a matter of consumer choices and reducing the distortions of a market within a market. More competition within these platforms and better interoperability between them, it is arguing here and elsewhere, can lower prices. Interpreting this sentence to mean “lower commissions and therefore lower app prices for consumers” seems to me like a stretch.

The study’s headline findings might sound negative, but it actually documents a modest increase in developer earnings (PDF) after adopting Apple’s “alternative business terms” from March – June 2024 compared to July – September after developer adoption:

The transaction data consists of over 41 million transactions for approximately 21,000 products on EU App Store storefronts, which generated €403 million in sales. The transactions were roughly split between the three months before and after enrolling in the alternative business terms.

[…]

First, looking at all digital products offered on each EU storefront, across all developers who enrolled in the alternative business terms from March 2024 through September 2024, the commission rate typically decreased by 10 percentage points after enrollment. This decrease is expected given the structure of the alternative business terms (see Box 1). These developers paid an estimated €20.1 million less in commission fees in the three months following their adoption of the alternative business terms.

[…]

Last, in addition to developers keeping most of the commission savings for themselves, the overwhelming majority of benefits to developers went to developers based outside of the EU. Of the €20.1 million reduction in commission fees, over 86% went to non-EU developers.

Against €403 million in sales, a €20 million reduction in commission is noteworthy. And even though most developers who benefitted are outside the E.U., many are probably small businesses; “more than 80% of the products studied” were not subject to the Core Technology Fee, which only applies to apps with more than a million annual installs. Few will be massive corporations like Meta and Uber, since those companies monetize their apps through advertisements or physical purchases not subject to Apple’s commission. It is hard for me to believe Apple having €20 million less in its bank account is of comparable impact to that of a bunch of small developers having €20 million more to spend and invest.

The price paid by consumers is not the only metric by which this legislation can or should be judged. I am not arguing the DMA is flawless, nor that it is necessarily achieving its objectives. This study, however, is being used to create a completely independent narrative. Perhaps somewhere the European Commission has argued consumers will see lower prices thanks to reduced App Store commissions, in which case this study provides some evidence to the contrary. If it has made that claim, I have not found it. What I do see in this report is a benefit to small developers despite Apple’s best efforts to make its alternative business terms uncompelling.