Apple opens up iOS to alternative app stores in the EU
Forced by the EU’s Digital Markets Act, Apple has today announced that it’s making big changes to iOS, the App Store, and how browsers work on the platform. These changes will become available in the EU with the iOS 17.4 release which is scheduled to land in March.
Let’s start with browsing. Even today you can select a default browser that isn’t Safari, but any browser that isn’t Safari has to use Safari’s WebKit rendering engine. That will change, every browser can use whatever engine it wants. Additionally, after EU iPhone owners install iOS 17.4, the first time they go into Safari they will be presented with a browser choice screen.
The much bigger news is that Apple will allow alternative app stores on iOS. Now, because the company says this will “create new risks” for its users, it will apply a “baseline review” for all apps, regardless of their distribution channel. This involves a combination of automated checks and human review. This process will result in at-a-glance descriptions of apps and their functionality which will be shown before download.
To ensure that developers of alternative app stores “commit to ongoing requirements that help protect users and app developers”, Apple will authorize these “marketplace developers”. It will also add additional protections that prevent iOS apps from launching if they are found to contain malware.
However, Apple notes that it has “less ability” to address risks such as “apps that contain scams, fraud, and abuse, or that expose users to illicit, objectionable, or harmful content” with the new DMA-forced provisions. The company plans to share more information with its customers in March when all these changes come into effect.
NFC will be opened up on iPhones in the EU, so that alternative wallet and banking apps will be able to use tap to pay and be set as the default method for mobile payments.
The App Store will have new options for using payment service providers within a developer’s app, as well as new options for processing payments “via link-out”, “where users can complete a transaction for digital goods and services on the developer’s external website”.
Users will be informed when an app they’re downloading uses alternative payment processing. They will also get a notice when they are no longer transacting with Apple, and when a developer is directing them to transact with an alternative payment processor. This will also entail a new app review process, through which Apple will verify that developers accurately communicate this information.
Moving forward, in the EU iOS apps on the App Store will pay a commission of either 10% (“for the vast majority of developers, and subscriptions following their first year”), or 17% on transactions for digital goods and services. There will also be a 3% payment processing fee for those apps that will choose to stick with the App Store’s payment processing. And finally, iOS apps “distributed from the App Store and/or an alternative app marketplace will pay €0.50 for each first annual install per year over a 1 million threshold” as a “Core Technology Fee”.
Apple says 99% of developers will reduce or maintain the fees they owe to Apple, while under 1% will have to pay the Core Technology Fee outlined above. For apps on iPadOS, macOS, watchOS, and tvOS in the EU, developers who process payments using a third-party or by linking out to their website will get a 3% discount on the commission they owe to Apple.