David Heinemeier Hansson

January 25, 2024

Apple’s new extortion regime to keep big app makers

Apple’s recent threat of financial audits for developers who dare link to their own website was a big, revealing moment to a lot of people. Folks who perhaps didn’t think Apple would be “that kind of company”. That they wouldn't so blatantly threaten developers into compliance with such overtly onerous and punitive terms. But they did. And now they’re doubling down.

At first glance, it could seem like Apple actually attempted some semblance of good faith compliance with the Digital Markets Act that goes into effect March 7 in the EU. But once you start peeling the onion, you realize it’s stuffed with poison pills so toxic you can scarcely believe Apple’s chutzpah.

Let’s start with the extortion regime that’ll befell any large developer who might be tempted to try hosting their app in one of these new alternative app stores that the EU forced Apple to allow.

And let’s take Meta as a good example. Their Instagram app alone is used by over 300 million people in Europe. Let’s just say for easy math there’s 250 million of those in the EU. In order to distribute Instagram on, say, a new Microsoft iOS App Store, Meta would have to pay Apple $11,277,174 PER MONTH(!!!) as a “Core Technology Fee”. That’s $135 MILLION DOLLARS per year. Just for the privilege of putting Instagram into a competing store. No fee if they stay in Apple’s App Store exclusively.


Holy shakedown, batman! That might be the most blatant extortion attempt ever committed to public policy by any technology company ever.

And Meta has many successful apps! WhatsApp is even more popular in Europe than Instagram, so that’s another $135M+/year. Then they gotta pay for the Facebook app too. There’s the Messenger app. You add a hundred million here and a hundred million there, and suddenly you’re talking about real money! Even for a big corporation like Meta, it would be an insane expense to offer all their apps in these new alternative app stores.

Which, of course, is the entire point. Apple doesn’t want Meta, or anyone, to actually use these alternative app stores. They want everything to stay exactly as it is, so they can continue with the rake undisturbed.

This poison pill is therefore explicitly designed to ensure that no second-party app store ever takes off. Without any of the big apps, there will be no draw, and there'll be no stores. All of the EU’s efforts to create competition in the digital markets will be for nothing. And Apple gets to send a clear signal: If you interrupt our toll-booth operation, we’ll make you regret it, and we’ll make you pay. Don’t resist, just let it be.

Let’s hope the EU doesn’t just let it be.

About David Heinemeier Hansson

Made Basecamp and HEY for the underdogs as co-owner and CTO of 37signals. Created Ruby on Rails. Wrote REWORK, It Doesn't Have to Be Crazy at Work, and REMOTE. Won at Le Mans as a racing driver. Fought the big tech monopolies as an antitrust advocate. Invested in Danish startups.