Apple has announced many changes coming to iOS in the European Union, such as a new fee for developers. The company is getting ready to release its answer to the Digital Markets Act (DMA), which is the EU’s ex ante competition reform.
In September, the EU named Apple as one of six “gatekeepers” that had to follow the DMA. The EU called the iOS App Store and Safari, Apple’s browser, “core platform services.” The law makes gatekeepers follow a set of rules and do certain things. In the case of Apple, this means making it accept sideloading of apps and other changes. March 7 is the last day for guards to follow the DMA.
Apple announced today that iOS 17.4 is now available in beta. The company says this will help developers get ready for the changes to its mobile platform that will happen next month to meet the EU’s deadline.
When Apple talked to reporters about the beta launch ahead of time, it said that it had been working on a way to meet with the DMA for months. But it also said that some of the changes will come with new risks for users. This is a long-standing case against sideloading, which says that it can make iOS users less safe and private.
Apple says the following changes are coming for iOS app makers who sell their apps in the European Economic Area (EEA):
There are now more ways to distribute iOS apps from different app stores. For example, developers can now offer their iOS apps for download from different app stores using new APIs and tools.
There are now new frameworks and APIs that can be used to make alternative app stores. Developers who make marketplace apps can now install apps and handle updates for other developers from their own marketplace apps.
There are now new frameworks and APIs for alternative browser engines. This means that developers can use browser engines other than WebKit for browser apps and apps that let you search within the app.
An interoperability request form—this is where developers can ask for more features to work with iPhone and iOS devices and software.
It was made public last week that Apple has made an offer to the EU to try to settle a competition case against Apply Pay. These proposed changes to contactless payments on iOS are said to be “DMA-compliant” today. They include new APIs that let developers use NFC technology in their banking and wallet apps across the EEA, as well as new controls that let users choose a third-party contactless payment app (or a different app marketplace) as their default.
However, the European Commission, which is in charge of making sure guards follow the DMA, will decide if these changes, along with the others Apple announced today, are in line with the law.
EU regulators could fine Apple up to 10% of its global yearly turnover if they decide that the changes it made do not follow the DMA. This would make Apple think again.
New Business Rules And A Fee For “Core Tech”
Along with the many changes that developers can use to improve DMA, Apple is also bringing new business terms in Europe. One of these is the creation of a new fee called the “Core Technology Fee.”
Apple seems to be doing this to make sure that they can keep getting a cut in some situations, even when developers choose to distribute their apps through other app stores or get users to pay for extra content by clicking on a link that takes them to their own websites where they can pay.
Apple says that developers of iOS apps that are sold in the App Store or another app store will get €0.50 for every first-time install over a million.
These new business terms must be agreed upon by developers who want to use the new features announced today, such as the ability to spread their apps through other app stores.
The new business terms for apps in the EU are needed to meet the DMA’s needs for different ways to distribute apps and process payments, Apple said in a press statement. Apple creates value for developers’ businesses in many ways, such as by distributing and discovering apps on the App Store, making sure payments are safe and secure on the App Store, providing a trusted and safe mobile platform, and giving developers all the tools and technology they need to make and share new apps with people all over the world.
According to the new business terms, Apple will also take less of a cut of digital sales made in its App Store for iOS apps. It will now only take 17% of digital goods and services transactions, or 10% “for the vast majority of developers and subscriptions following their first year,” as Apple puts it.
Another fee that Apple will charge is an extra 3% for iOS apps in the App Store that want to use its own payment technology.
But makers can choose to use a different payment service provider in their app or send users to their website to pay without going through the App Store. Apple doesn’t charge them a “additional fee” for this.
Apple also said that developers will be able to stick to the way it does business now, which is by taking a 30% (or 15% for small businesses) cut of all in-app payments made in apps that are sold in the App Store.
No matter what terms creators choose, Apple says they will still be able to use the App Store’s payment processing technology and sell their apps on the EU’s App Store.
The tech giant said that it thinks more than 99% of developers will either lower or keep the fees they owe it under the new business terms.
Also, it seems like less than 1% of makers will pay the Core Technology Fee for their EU apps. This is because the fee is only meant to be paid by apps that are very popular (for example, those that are on millions of iOS devices).
Apple says that the new fee is fair because it pays for the value of its technology base and services, which are separate from the App Store’s features and reach.
The DMA does require certain app shops to allow sideloading, but it doesn’t force them to use certain business models. However, it’s still not clear if Apple’s careful reorganisation of its business terms in the EU and the specific options it’s giving developers will be okay with regulators.
So Apple will have to show that this system is “fair, reasonable, and non-discriminatory” in order to stay out of trouble with the DMA.
Apple is also adding a few new features to its platform that it may say are worth the extra cost. These include notarization for iOS apps (which the company says will include “a baseline review that applies to all apps, regardless of their distribution channel, focused on platform integrity and protecting users” and will include both automated checks and human review); app installation sheets (which will use information from the notarization process); and app installation sheets.
When Apple executives met with reporters today, they made it clear that the changes the EU wants them to make will bring about new risks for iOS users.
The company specifically pointed out the security risk of letting iOS apps put other apps on the user’s device (Apple calls these other app stores “marketplace apps”). It said that this was a common way for malware to get into devices. While its officials said there has never been a large-scale malware attack on iOS by consumers.
Any developer who agrees to Apple’s new business terms will be able to make marketplace apps, but they will still have to go through Apple’s app review process and meet rules that the company says are meant to protect both users and developers.
Other upcoming changes include a new choice screen for iOS users that will let them choose their default browser, showing a selection of rival browsers along with Apple’s own Safari browser; and the ability for developers to make changes to the App Store and Safari browser. Some of these changes are in response to other DMA demands on how Apple can run its services, while others seem to be meant to warn iOS users to be very careful before choosing any non-Apple options. Apple says that the new App Store product page labels will let users know when an app they’re downloading uses an alternative payment processor; in-app disclosure sheets that will tell users when they’re no longer dealing with Apple and when a developer is telling them to use an alternative payment processor; Apple has added new App Review processes to make sure that developers are giving correct information about transactions that use alternative payment processors. The company has also made it easier for EU users to get new data about how they use the App Store and send it to a third party that is authorised to do so.
Apple may try to get people to keep using its own payment system to buy third-party apps by letting iOS users know when they’re no longer doing business with the company. On the other hand, Apple could say that this is just a “fair and reasonable” warning to give its users when they leave its controlled environment.
The DMA also lets gatekeepers take “strictly necessary and proportionate” steps to make sure that third-party apps and stores, or the new interoperability requirements required by the DMA, don’t put hardware, software, or operating systems they provide at risk. However, any steps taken must be “duly justified by the gatekeeper.”
Apple also announced today that developers will be able to make something like a streaming games app shop.
Read More: If an Artist Wants to Have a Spatial Audio Version on Apple Music, Apple Will Pay Them More
Epic Games quickly criticised Apple’s move, saying that its EU offering was “malicious compliance” full of “junk fees.” This came after the company sued Apple in the US over App Store rules.
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