January 28th update below. This post was first published on January 25, 2024.
Have you downloaded Apple iOS 17.3? The first development beta for iOS 17.4 arrives today, January 25. And it includes big changes coming to iPhone and the App Store in Europe. Apple even told us when it’s coming: in March. Here’s what we learned—and why it’s important for US users, too.
Apple iPhone 15 Pro: Big changes coming to iPhone in a few weeks in Europe.
The unexpected announcement is linked to an upcoming deadline in the European Union, March 7, for companies to comply with something called the Digital Markets Act.
Apple’s news was posted in the Apple Newsroom and explains what’s changing. For starters, iPhone users in the EU will be able to download and install apps outside of the App Store, something Apple has previously fought against and was impossible unless you had a jailbroken iPhone.
In addition to these news, other app stores will be possible from March, which is a very big news. Any developer can set up an app marketplace, though it must meet Apple’s policies for user experience, fraud prevention, and more. Apple creates interfaces for application programming. These APIs allow different pieces of software to communicate with each other and in this case that means an external app market can function as an iOS app that can install other apps on your device.
Things will suddenly be much more similar to those on the Mac, where apps can be downloaded from sources outside of the Mac App Store. Apple has always maintained an iron grip on ensuring that the user experience is not compromised and that there are no security issues arising from direct downloads.
Apps coming from alternative app stores will have to go through a notary public authentication process including safety and security checks.
With this news comes another big change. Apps from external markets will not be subject to the 30% commission that most apps attract. Instead, Apple will charge a core technology fee of 54c (€0.5) per installation per account each year. This fee only comes into play after 1 million installs. That could mean cheaper apps, and a lot more than there are currently (although, you know what, there are already plenty).
App developers can still choose to distribute through the App Store as they do now, but with a significantly reduced commission of 17%, plus 3% for using Apple’s payment system instead of an alternative payment system, something that will also come with the new rules. NFC payments that don’t use Apple Pay or the Wallet app will arrive thanks to something called Host Card Emulation.
WebKit won’t be needed for third-party browser apps either, so alternative browser engines will suddenly be possible.
So why does all this matter outside the EU? Although the changes are only for European markets, you can bet that the US government, which is already keeping a close eye on Apple and its App Stores, will be watching what happens before taking action of their own.
If it works in Europe, you can bet that the American authorities will want to introduce such sweeping changes in America as well.
Update as of January 26. Apple’s announcement of how it will comply with the Digital Markets Act deadline of March 7 was detailed and complex, to say the least. So it’s no surprise that the ground is still settling after that.
For example, would the Act, which is not entirely different from the law sought to be implemented in the UK, mean that Apple will also apply the changes to UK users? After all, even though the UK left the EU a few years ago, we could be considered part of the European market in Apple’s eyes.
The answer is no. Apple has made it clear that it is making the changes because it is required by the EU and that it does not consider the results to be that safe for its users, so it will not spread to where it affects an inch more than it is. The affected countries are strictly those in the European Economic Area, which means 27 countries in the EU, plus Iceland, Liechtenstein and Norway. Switzerland is part of the single market, but not in the EEA.
Equally important as the provisions of alternative app stores are alternative payment options, and developers can integrate them into their apps, for example. Similarly, the move to enable NFC payments that don’t require Apple Pay or the Wallet app is a very big move – although I doubt many people will be happy to stick with Apple Pay with its flawless security.
Apple iPhone users have been able to choose their default search engine for several years, and users in the EU will be able to choose their default browser. Other browsers are already available, such as Chrome, Firefox and Microsoft Edge, but it will be easy to set it as the default choice.
Since the announcement, there has been criticism of the proposed underlying technology fee, saying it could bankrupt some apps or be expensive for apps like Spotify with millions of users.
There’s more to learn about this new development, so check back.
Update as of January 28. Reactions to Apple’s new moves to comply with the Digital Markets Act for consumers in the European Union continue to be swift – and not all of them are good.
The reliably astute John Gruber described the DMA as anti-American big business. “There are aspects of it that seem specifically written for Spotify, in fact… I don’t think DMA will change much, if anything, for the better for iOS users in the EU.” He describes the DMA as a “terrible piece of legislation”.
He talks about core technology fees and says, “In fact, Apple says their fair share of App Store distribution is 17/10 percent, and that Apple’s own payment processing in the App Store is worth an additional 3 percent. (3 percent is almost certainly a fair estimate for payment processing costs alone.) And that’s why apps distributed outside of the App Store will pay Apple only CTF, with no sales commission. Commissions according to the new EU rules apply only to the App Store, so applications from markets do not pay them. A fee for the underlying technology is how Apple proposes to monetize the value provided by iOS itself.”
And he believes there will be practical effects for users, saying: “Apple’s main concern is certainly control. Control encompasses all of Apple’s concerns, from its own revenues to user experiences. Any form of DMA compliance necessarily implies that Apple loses some control over the iOS platform. (Any users who switch from Safari or any other WebKit-based browser to a browser that uses Google Chrome’s Blink or Mozilla Firefox/Gecko rendering engines will almost certainly experience an adverse hit to battery life.”
Will all the comments affect what Apple announces in early March? Not right away, for sure, but there may be possible tweaks down the line. More than we have.