Apple is revamping the App Store in Europe in response to the new digital law
Since Apple introduced the App Store In 2008, the company tightly controlled the apps and services allowed on iPhones and iPads, tightening its grip on one of the digital economy’s most valuable arenas.
Now Apple is weakening its grip on the store, one of the most consequential signs yet of how new it is European regulations are transforming consumer technology.
To comply with a European Union competition law that takes effect March 7, Apple on Thursday announced major changes to the App Store and other services for consumers in Europe. iPhone and iPad users in the 27-nation bloc will be able to use alternative app stores to download games, productivity tools and other apps for the first time. Banks and shopping services may offer competing payment methods in their apps. Anyone who buys a new iPhone in the future will also see a new menu for downloading alternative browsers to Apple’s Safari, such as Chrome and Firefox.
The changes are some of the most tangible examples of how a Chessboard of laws and regulations is now splitting people’s technology experiences depending on where they live. In China, government regulations are forcing Apple to block apps such as virtual private networks, known as VPNs, that would allow users to access the unfiltered internet. In Europe, customers now have access to competing app stores and other services. In the United States, where there are fewer laws and regulations, Apple and other tech giants have more flexibility and can operate as they please.
The changes in the App Store are due to a 2022 law called the “Digital Markets Act”. The wide-ranging law was aimed at weakening the power of the world’s largest technology companies in areas such as e-commerce, social media and messaging. Amazon, MetaGoogle and Microsoft have also announced changes to comply with the new rules.
“The changes we are announcing today comply with the requirements of the Digital Markets Act in the European Union, while helping to protect EU users from the inevitable increased privacy and security threats that this regulation brings,” said Phil Schiller, who runs the App Store, made a statement.
Europe accounts for about 6 percent of Apple’s App Store revenue, which is estimated at $24 billion annually worldwide.
EU regulators have long warned that Apple is abusing its control over the App Store to stifle competition. The Silicon Valley company has argued that its gatekeeper role protects customers from malware, data breaches and buggy apps. But app developers like Spotify and Epic gamesthe maker of Fortnite, said that Apple abuses its power by charging them high fees and forcing them to use the underlying technology the company develops.
Apple has been resisting the changes announced on Thursday for years. It is unclear whether the moves will satisfy European regulators, who have vowed to vigorously enforce compliance with the Digital Markets Act.
A spokesman for the European Commission, the executive arm of the European Union, declined to comment on Apple’s announcement.
Apple said it would maintain some oversight over new marketplaces and apps operating outside its App Store, but warned that the new EU guidelines would open a new avenue for hackers and criminals to spread malware and defraud customers. The company said it has developed a system to monitor all iOS apps, approve alternative app stores and track alternative payment systems.
Apple said developers would also charge a fee of 50 euro cents for each download of their app after it has been downloaded a million times or more within 12 months, whether through the App Store or an alternative. This also applies to free apps, but not to apps distributed by government, educational institutions and non-profit organizations.
The new rules could put a strain on Apple’s finances. The App Store’s policy of taking up to 30 percent of developer revenue has made it an important part of the company’s nearly $400 billion business. But it also exposed Apple to criticism and regulatory scrutiny because many developers complained that the fees were unfair.
In Europe, Apple said developers using the App Store will have the option to continue using existing commission terms or switch to a new fee structure. This includes a reduced commission of up to 17 percent for digital goods and services. Developers using Apple’s payment system will be charged an additional 3 percent fee.
Tim Sweeney, the chief executive of Epic Games, said Apple’s new policies were a “horror show” for developers, full of “new junk fees for downloads and Apple taxes on payments they don’t process.” He said Apple also retains the power to prevent a company like Epic from launching a games store.
“Apple is proposing that it can choose which stores are allowed to compete with its App Store,” he said said in a post on X.
Apple said its fees cover the costs of developing its software and providing tools to developers.
Developers who distribute their app through a competing app store are not subject to Apple commission. And developers who provide links to process payments outside of their apps can also waive certain transaction fees.
Developers will also be able to avoid what some say is Apple’s cumbersome review process for apps sold in its store. However, the company has developed a new system called Notarization to maintain some control over the apps distributed on iPhones. Every iPhone app contains an installation key that provides Apple with information about when it was installed and allows the company to run automated scans for malware.
As part of the attestation process, apps provide Apple with descriptions and screenshots of the services they offer, as well as the names of their developers. Apple will share this information with iPhone users before downloading an app.
Spotify did not initially comment on Apple’s announcement. In one blog entry This week Spotify said the Digital Markets Act would help developers offer new services to their customers.
“Developers around the world continue to call on other governments to pass their own laws like the DMA,” the company said.
Apple also introduced a feature that allows customers to use alternatives to its Wallet app for mobile payments, an increasingly common form of payment for public transit, restaurants and cafes. Big banks and companies like PayPal can now offer competing services.
Apple has challenged some elements of the new European law, including a requirement that would open up its messaging service iMessage to work more smoothly with Android devices. The company has argued that iMessage is not subject to the requirements because it is free for customers.
The European Union has not yet made a final decision on the messaging issue.