In order to comply with the EU’s Digital Market Act, Apple announced changes to its payment system for EU app sellers on January 25 and gave up App Store control over the distribution of EU iOS apps. In addition to the App Store changes, Apple will prompt iOS users in the EU to choose their preferred browser instead of using Safari according to the DMA default. These changes will be included in the EU release of iOS 17.4 in March.
Starting in March 2024, developers of iOS apps will be able to distribute them through alternative storefronts (compared to the App Store) in the EU.
Why does Apple have to allow other app stores?
The EU established the DMA to “ensure[e] Fair and open digital markets,” the European Commission said. The DMA aims to prevent tech giants from becoming “gatekeepers” and will come into effect in May 2023.
“Innovators and technology startups will have new opportunities to compete and innovate in an online platform environment without having to comply with unfair terms and conditions that restrict their development,” the committee wrote.
In response, Apple has created new options for iOS, Safari on iOS, the App Store, and developer app analytics.
New options for iOS in the EU will include:
- APIs and other tools assist developers in offering applications on alternative markets.
- Framework and API for creating marketplaces.
- A framework and API for a browser engine that replaces WebKit.
- Request form for developers looking to interoperate with iPhone and iOS hardware and software.
- Notarization of iOS apps, a review process that includes manual and automated checks.
- App install table for users, app developers, screenshots, and other information.
- New malware protection prevents devices from launching malicious iOS applications.
- Authorization process for app market developers.
See: Apple has been relatively quiet on AI chatbots, but did release a study on running generative AI on phones and tablets (TechRepublic)
Will Apple’s response be a benefit or a disadvantage to app developers?
There’s widespread debate over whether Apple’s move will ultimately be good or bad for app makers large and small, end users, Apple, and the tech industry as a whole.
“One of the main positives for developers is the non-discriminatory business environment it (DMA) is supposed to create,” Annette Zimmermann, vice president and analyst at Gartner, said in an email to TechRepublic. “This means, For example, apps should not be arbitrarily removed due to subjective app store policies.”
“Apple is less able to address other risks, including apps that contain scams, fraud, and abuse, or that expose users to illegal, objectionable, or harmful content,” Apple said in a press release. “In addition, use Applications that replace browser engines (other than Apple WebKit) may have a negative impact on the user experience, including impacts on system performance and battery life.”
In response to the DMA, Apple imposed a “core technology fee” on apps not distributed through the App Store, which some groups considered too high.
How much is Apple’s EU core technology fee?
The core technology fee is €0.50 upon first annual installations exceeding 1 million in the past 12 months. Apple expects less than 1% of app makers to meet the threshold to pay the fee.
Developers can stay within the existing Apple Store ecosystem, which takes a commission from the revenue from apps sold in the store.
The fee for iOS apps on the EU App Store is 10% for most developers and 17% for digital goods and services. iOS app developers can use the App Store’s payment processing capabilities in the EU, but will be required to pay an additional 3% fee within the App Store.
Epic Games and Spotify object to Apple’s fees
One company that has objected to Apple’s compliance with the DMA is Epic Games, the developer and publisher of Fortress Heroes, which has been fighting Apple and Google for years over where in-app purchase revenue goes.
“Apple’s plan to block Europe’s new Digital Markets Act is a cunning new example of bad faith compliance,” wrote Epic Games CEO Timon. “They force developers to choose between App Store exclusivity and store terms, which are illegal under the DMA, or accept an equally illegal new anti-competitive scheme filled with new download spam fees and targeting them New Apple tax on payments not processed. “.
Spotify called Apple’s new policy a “complete farce” and cited new fees for app developers to distribute their apps on iOS, “rents” in the App Store and new core technology fees.
Spotify’s statement said, “Apple is forcing developers to maintain the status quo – an alternative that leaves no other options and which completely negates the goals of the DMA.”
Apple treats its App Market as a security measure
Apple defines DMA as exposing users to potentially harmful material accessed through app stores that are not regulated by Apple. “New options for processing payments and downloading apps on iOS open up new avenues for malware, fraud and scams, illegal and harmful content, and other privacy and security threats,” Apple’s press release states. “It’s possible – Apple on Such material is restricted in its App Store. Apple added Notarization to iOS apps in an attempt to curb harmful content.
“Apple faces a lot of risk because the closed ecosystem it offers has become one of its strongest assets and value propositions,” Zimmerman said. “Security and privacy have always been Apple’s biggest differentiators. One of the factors, and DMA is challenging that.”
Browser options and other changes for EU iOS
Other changes Apple has made to iOS as a result of DMA include:
- iOS users will be prompted to select a default browser instead of being automatically directed to Safari.
- New option for developers to use payment providers within their applications.
- New option to process payments through links external to the App Store (such as a developer’s external website).
- Business planning tool for developers.
Apple is expected to free up more resources for EU users to help them navigate the changes ahead of the March launch.
