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Apple CEO Tim Cook attends the “Senior China Leaders Event” hosted by the National Committee on US-China Relations and the US-China Business Council on the sidelines of Asia-Pacific Economic Cooperation (APEC) Leaders Week in San Francisco, California. , on November 15, 2023.
Carlos Barria AFP | getty images
Apple Apple announced plans to open its iPhone App Store to competitors in Europe on Thursday, a move that opens cracks in the company’s famous “walled garden” with which it controls app distribution on its devices.
Apple didn’t take these steps voluntarily — the changes were required by new European law, the Digital Markets Act, which forces big tech companies to open up their platforms by March this year.
The new rules could jeopardize Apple’s lucrative App Store fees, especially if developers like Spotify and Microsoft take advantage of new rules that allow them to bypass Apple’s 30% fee on in-app purchases and create their own for the iPhone. Competing app stores allow release. ,
But Apple also announced a new fee structure in Europe that includes an annual fee per installation for popular apps that don’t use Apple’s App Store, raising the possibility that many larger developers will pay Apple the same amount. Will do, even if they take advantage. Of new capabilities.
Apple said Thursday it believes the new regulation puts its users at risk of scams, fraud and abuse, because apps that don’t pass through Apple’s App Store are not reviewed for content and contain May contain malware. It also warned that some new browser apps using “engines” not made by Apple capable of DMA could harm the user’s battery life.
Developers in general are likely to celebrate, as many have been frustrated for years by Apple’s fees and harsh app review program that often rejects app updates. While regulators around the world have aimed for Apple to open up its platforms, Thursday’s changes are the harshest yet and could provide a preview of what could happen if the US imposes similar rules.
These changes are limited to accounts registered in Europe and the EU, rather than changing the way iPhone app distribution works in the US. These changes will go live in an iOS software update in March.
“Developers can now learn about new tools and conditions available for alternative app distribution and alternative payment processing, alternative browser engines and new capabilities for contactless payments, and much more,” Apple App Store boss Phil Schiller said in a statement. Are.”
what has changed here
Apple said it would allow non-Apple companies to offer App Stores in Europe, but the system requires an application to Apple to receive “authorization.”
The new App Stores will be “special” iOS apps that will integrate with Apple software that it created to comply with the DMA. Apple will know which companies run app stores, and the company will be able to revoke those permissions if other app stores are full of scams or malware.
For users, this means that apps installed from alternative app stores will appear in Settings, with details about when and where they were downloaded. When developers upload an app for Europe, they will be able to choose which app store they want to distribute it through. Apple will “notarize” the apps, meaning the company will scan them for malware and other code problems.
For developers like Spotify and Microsoft, who have expressed interest in distributing apps outside the App Store in Europe, the rules do not contradict their stated plans, but Apple’s implementation does not contradict offering an installation file for download on their website. Beyond adds obstacles.
Apple will also allow app developers to bill their users directly. Previously, apps could only charge users for digital goods – for example game coins – through Apple’s billing system, which amounts to between 15% and 30% of total sales.
Now, Apple will allow iPhone app developers to capture credit card numbers inside the app, or app developers can choose to link users to their website to collect their payment information.
However, Apple said Thursday that it still plans to collect fees and commissions from apps, whether they handle their own payments or are distributed through alternative app stores. Developers can stick with the current system, but if they opt for one of the new capabilities in Europe, Apple will start charging lower commission rates in Europe, but add install fees for popular apps.
“The important thing is that developers can choose to remain on the same commercial terms as they are today if they wish,” Schiller said in the statement.
According to Apple, here are the new business terms:
- Under the new terms, iOS apps on the App Store will pay Apple between 10% and 17% of total digital sales, depending on whether they are subscriptions or if the app earns a small amount.
- Apps distributed through alternative App Stores will not receive full review for content, as App Store apps do, but they will not have to pay any commission to Apple.
- Under the new rules, iOS apps in Europe can still opt to use Apple’s in-app purchase software for a 3% fee.
- Apple will charge an annual fee of half a euro for each first-time app installation from more than 1 million users, which it says will cover some of Apple’s costs of developing software and distributing apps.
- A “Core Technology Fee” applies if apps are downloaded through a third-party app store or Apple’s App Store. Developers can distribute their apps on the App Store as well as third-party options at the same time, and the fee covers installs on both. At least 1 million accounts in Europe can download an app each year before Apple starts charging fees.
Work on DMA has been going on for years. Spotify, among other companies, lobbied heavily for its launch in 2019. It will take effect in March, but other parts of Apple’s business could come under scrutiny as the European Commission continues to investigate Apple’s business practices — in particular, it could focus on building Apple’s iMessage service. Interoperable with competitors.
On Thursday, Apple also made changes to the way its digital wallet technology is made accessible, while also allowing competitors to use different built-in web browser technology.
Earlier this month, European Commission antitrust chief Margrethe Vestager met with Apple CEO Tim Cook in California. He Posted on social media They discussed Apple’s compliance with the law.
Tim Sweeney, CEO of Epic Games Posted on social media on Thursday that Apple’s plan was “a new blatant example of malicious compliance”, arguing that its new business terms were tantamount to “junk fees”. Epic Games sued Apple in the US over antitrust and similar App Store restrictions in 2020, mostly losing, and the Supreme Court declined to hear an appeal earlier this month.
Spotify said Friday that Apple’s changes were against the goals of the DMA and urged regulators to reject them.
“The ball is in your court, European Commissioners, and you must forever reject this blatant disregard for the principles you have worked so hard to establish,” Spotify said in a blog post.
“We strongly encourage designated gatekeepers to test their proposals with third parties,” a European Commission spokesperson told CNBC.
