Apple Complies with European Law, Opening iPhone App Store to Competitors

Tech Giant Announces Changes to Its App Store Policies in Accordance With the Digital Markets Act

Advertisement

Apple revealed its plans on Thursday to open up its iPhone App Store in Europe to competitors, marking a significant departure from its traditional closed ecosystem. These changes are a response to the new European law, the Digital Markets Act (DMA), which mandates large tech companies to open up their platforms by March of this year.

The DMA requires Apple to allow non-Apple companies to offer alternative app stores in Europe. This move could potentially impact Apple’s App Store fees, particularly the 30% fee on in-app purchases, as developers gain the option to release their own competing app stores for iPhones.

Apple outlined a new fee structure in Europe, introducing an annual charge per installation for popular apps that don’t utilize Apple’s App Store. This adjustment raises the possibility that prominent developers may end up paying similar amounts to Apple, even if they take advantage of the new regulations.

Advertisement

The changes, set to go live in March through an iOS software update, are limited to Europe and accounts registered in the European Union.

Key Changes Include:

1. Alternative App Stores: Apple will allow non-Apple companies to offer app stores in Europe, subject to obtaining authorization from Apple. These alternative app stores will be special iOS apps that integrate with Apple’s software built to comply with the DMA.

2. User Visibility: Apps installed from alternative app stores will be visible in settings, showing details about when they were downloaded and their source.

3. Developer Billing Flexibility: App developers can bill users directly, offering more flexibility in payment processing. This marks a departure from the previous restriction where digital goods had to go through Apple’s billing system.

4. Fee Structure Changes:
– For iOS apps on the App Store, Apple will charge between 10% and 17% of total digital sales, depending on factors such as subscriptions and revenue.
– Apps distributed through alternative app stores won’t pay any commission to Apple but won’t undergo the full content review process.
– A new “Core Technology Fee” applies, covering installations over 1 million users and costing half a euro for each first-time app installation.

5. Annual Install Fee: Apple will charge an annual fee per first-time app installation over 1 million users, covering the costs of software development and app distribution.

While developers may welcome the changes, Apple expressed concerns about user safety, fraud, and abuse, arguing that apps outside the App Store could pose security risks.

The alterations in Apple’s App Store policies are specific to Europe and signify a response to ongoing regulatory pressures. These changes might offer insights into potential shifts in Apple’s approach if similar regulations are implemented in the U.S.