Roundup/DMA effect: Apple allows other app stores on iPhone in EU | 01/26/24

CUPERTINO (dpa-AFX) – In the future, Apple will allow applications from other providers' markets to be installed on iPhones in the European Union. The group also allows competitive payment methods and alternative technologies for web browsers that were previously disallowed due to security risks. Gaming company Epic wants to use the new possibilities to bring back its game “Fortnite” which was banned three years ago to iPhone.

With the changes, Apple is reacting to the legal requirements of the new EU legislation on digital markets (Digital Markets Act/DMA). After that, the big and dominant providers, the so-called gatekeepers, must allow app stores from other providers. Previously, you could only download apps on iPhones from the company's internal download site.

However, Apple retains some control over the installation of applications, even if they happen outside of its own app store. Apps cannot be used like Google (Alphabet C (ex Google)) system Android Download and install at your own risk using your browser. Instead, customers must use “certified” marketplaces for this. These are iPhone apps that, with Apple's blessing, are allowed to install other apps.

In an interview with the German Press Agency, Apple manager Bill Schiller pointed out the risks associated with direct installation. “If any website is able to download apps onto a device, it poses a huge threat to user security and privacy,” Schiller said. The certification process also meets the requirements of EU legislation. Overall, however, users in Europe are more at risk than users outside the EU from measures implemented by the DMA.

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With the announced implementation, Apple will be able to automatically check all apps for malware and other security threats in the future, even in alternative markets. However, the business practices associated with the App or the content displayed there have not been verified.

Game developer Epic, which has been at loggerheads with Apple, announced its own app store for the iPhone this year soon after the new rules were announced. “Fortnite” hasn't been downloadable on iPhones for more than three years. Apple removed the game from its App Store in August 2020 after Epic used a trick to avoid a 30 percent levy when purchasing digital content. Epic took the eviction to court, but lost. Outside of the European Union, Apple has yet to allow “Fortnite” into the App Store.

Epic boss Tim Sweeney also accused Apple of undermining competition with its planned implementation of DMA. Among other things, he pointed out, Apple could block competing app stores from Epic or Microsoft by “recognizing” the markets. However, none of this stopped Epic from announcing its own app store for iPhones.

Alongside the adjustments to the App Stores, Apple is introducing further changes to counter the EU's accusations of monopoly. In the future, European users will be able to freely set the default browser on the iPhone. Until now, Apple's Safari browser automatically opened all web links. In the future, browsers like Google Chrome will also be able to perform this task. Firefox, Microsoft Edge, Brave, Opera or DuckDuckGo. Competitors are no longer forced to use Apple's preferred “WebKit” technology to display websites in their apps, but are allowed to use their own “web engines”.

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To use the new options, the device must have the latest operating system version iOS 17.4 should be installed.

Apple's monopoly on contactless payment transactions with the iPhone is also waning in the EU. Until now, the iPhone's NFC (“Near Field Communication”) functionality was the only way Apple Pay, the internal payment service, could make payments at a supermarket checkout or other payment terminal. In the future, users will be able to decide which paid app should start by default.

Apple shows little room when it comes to contentious revenue sharing for paid apps or in-app purchases. Until now, Apple needed small developers and long-term subscriptions to share 15 percent of sales. Providers with turnover of more than a million dollars a year must pay an even 30 percent. These commissions will now be reduced to 10 percent and 17 percent. Developers will have to pay an additional three percent if they use the app store's payment processing. As a concession to the EU, Apple now allows developers to use an alternative payment processor in their app or connect users to a website to make payments without additional fees from Apple.

A new “Core Technology Fee” will be introduced for frequently installed apps. Payment is due after one million initial installs on an app within a twelve-month period – subsequent updates do not count. After reaching the million, 50 euro cents will be charged for each additional initial installation of the application during this period. Apple expects less than one percent of developers to pay this fee for their EU apps. Developers can stick to previous App Store conditions./chd/DP/zb

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