Summary
- Xbox President Sarah Bond criticizes Apple's response to the Digital Markets Act, calling it a step in the wrong direction.
- The fees associated with Apple's new model are a contentious issue, with Spotify head Daniel Ek labeling it as "extortion."
- These new regulations could pose challenges for Xbox's ambitions to build its own mobile store and compete with Apple.
Many company heads, like Xbox President Sarah Bond, are speaking out against Apple's response to a recent tech regulation in Europe referred to as the Digital Markets Act (DMA). The DMA requires platforms like Apple to offer third-party app stores, which seems like a positive move on the surface. However, Apple has drawn criticism from Xbox, Spotify, and Epic Games due to the fees associated with the new model.
Apple has long faced criticism concerning its pricing structure for apps on the popular iOS platform. Notably, Epic Games has been locked in a years-long legal battle with Apple over iOS' 30% commission from Fortnite' s microtransactions. After being pulled from the App Store for several years, Fortnite is coming back to iOS devices in 2024 thanks to the DMA. Unfortunately, this return only applies to countries in the European Union.
Xbox President Sarah Bond Speaks Out Against Apple
New Xbox President Sarah Bond spoke out against Apple's response to the DMA on social media, quoting a lengthy thread from Spotify head Daniel Ek. Bond refers to the move as a "step in the wrong direction," but Ek goes a step further and calls the act "extortion." While Apple is technically adhering to the DMA, Ek asserts that the fees associated with the new model are potentially worse than the current structure. The main cited reason for this is the 0.50 cent Euro fee for every app download after the millionth installation. For popular apps, this could result in fees of tens or hundreds of millions of Euros in perpetuity. These fees are accompanied by the existing 17% commission iOS chargers for digital goods purchased on the platform (or 10% for recurring payments).
Essentially, Ek argues that Apple is offering a false choice between this new, potentially much worse program or the "status quo." Bond jumping into the conversation is interesting considering Xbox wants to build its own mobile store to rival Apple and Google. As Apple comfortably controls the mobile market share with the iPhone, these new regulations could present problems for Xbox's ambitions.
Companies have experienced even less success battling with Apple in court in the US than in Europe. Just last year, the Ninth US Circuit Court ruled in favor of Apple in the ongoing Fortnite lawsuit.
Xbox looks to have an interesting year following Microsoft's acquisition of Activision Blizzard last fall. Unfortunately, Microsoft started the year off with mass layoffs within the company's gaming division alone, which led to 1,900 employees losing their jobs. This continues a sad trend of layoffs which has plagued the gaming industry in recent months.
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