In a recent Form 10-K filing with the SEC, Apple has revealed that intends to make changes to the App Store by March 2024 to comply with the EU's Digital Markets Act.
The DMA will likely force Apple to significantly alter how it operates the App Store, including giving users the ability to sideload apps and use third party payment systems. Apple has vehemently opposed the DMA which will make it illegal to restrict which apps users can install on their devices; however, it appears the company will capitulate.
The Company distributes third-party applications for its products through the App Store. For the vast majority of applications, developers keep all of the revenue they generate on the App Store. The Company retains a commission from sales of applications and sales of digital services or goods initiated within an application. From time to time, the Company has made changes to its App Store, including actions taken in response to competition, market conditions and legal and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the App Store, such as the European Union ("EU") Digital Markets Act, which the Company is required to comply with by March 2024.
Notably, Apple also indicates that litigation and investigations into the App Store could result in further changes.
The Company is also subject to litigation and investigations relating to the App Store, which have resulted in changes to the Company's business practices, and may in the future result in further changes. Changes have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms. Future changes could also affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App Store, and how and to what extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms.
Finally, Apple notes that all these changes could affect the company's profitability.
This could reduce the volume of sales, and the commission that the Company earns on those sales, would decrease. If the rate of the commission that the Company retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the Company's business, results of operations and financial condition could be materially adversely affected.
Check out the full filing below...
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The DMA will likely force Apple to significantly alter how it operates the App Store, including giving users the ability to sideload apps and use third party payment systems. Apple has vehemently opposed the DMA which will make it illegal to restrict which apps users can install on their devices; however, it appears the company will capitulate.
The Company distributes third-party applications for its products through the App Store. For the vast majority of applications, developers keep all of the revenue they generate on the App Store. The Company retains a commission from sales of applications and sales of digital services or goods initiated within an application. From time to time, the Company has made changes to its App Store, including actions taken in response to competition, market conditions and legal and regulatory requirements. The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the App Store, such as the European Union ("EU") Digital Markets Act, which the Company is required to comply with by March 2024.
Notably, Apple also indicates that litigation and investigations into the App Store could result in further changes.
The Company is also subject to litigation and investigations relating to the App Store, which have resulted in changes to the Company's business practices, and may in the future result in further changes. Changes have included how developers communicate with consumers outside the App Store regarding alternative purchasing mechanisms. Future changes could also affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App Store, and how and to what extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms.
Finally, Apple notes that all these changes could affect the company's profitability.
This could reduce the volume of sales, and the commission that the Company earns on those sales, would decrease. If the rate of the commission that the Company retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the Company's business, results of operations and financial condition could be materially adversely affected.
Check out the full filing below...
Read More