The European App Store Landscape

Apple has announced plans to open up its iPhone App Store in Europe to competitors. This move is a significant shift from their previous “walled garden” approach, where they tightly controlled app distribution on their devices. The changes were necessitated by a new European law called the Digital Markets Act (DMA), which mandates that big tech companies open up their platforms by March 2024.

Here are the key points regarding this development:

1. Opening Up to Competitors: Apple will allow competitors to offer their own app stores for iPhones in Europe. This means that developers like Spotify and Microsoft can bypass Apple’s 30% fee on in-app purchases and create their own competing app stores.
2. New Fee Structure: While Apple is opening up its platform, it has also introduced a new fee structure in Europe. Popular apps that don’t use Apple’s App Store will be subject to an annual charge per installation. This means that even if developers take advantage of the new capabilities, they may end up paying a similar amount to Apple.
3. User Safety Concerns: Apple argues that the new regulation puts users at risk for scams, fraud, and abuse. Apps that don’t go through Apple’s App Store won’t be reviewed for content and could potentially contain malware. Additionally, some new browser apps using non-Apple engines enabled by the DMA could impact user battery life.
4. Developer Reactions: Many developers have long been unhappy with Apple’s fees and rigorous App Review program. These changes are likely to be celebrated by developers who have faced challenges with Apple’s existing policies.
5. European Focus: It’s important to note that these changes are specific to Europe and apply to accounts registered in the European Union. The way iPhone app distribution works in the U.S. remains unaffected.

The new rules will go live in an iOS software update scheduled for March 2024. Developers can now explore the new tools and terms available for alternative app distribution and payment processing1. This move could serve as a preview of what might happen if similar regulations were implemented in the U.S.