Apple is now forced to bring alternate app stores to iPhone

Apple is set to make significant changes to its iPhone app ecosystem following the European Union’s implementation of the Digital Markets Act (DMA) in March. The key announcement is the allowance of third-party app stores on iOS for the first time, disrupting the exclusive distribution role of the Apple App Store. The alterations are scheduled to accompany the release of iOS 17.4 in March.

Read: This is how you check your Android phone’s battery health

Under the new guidelines, referred to as “alternative app marketplaces,” users in the EU using iOS 17.4 can download a marketplace from its website, subject to Apple’s approval process. While users grant permission to download apps, including those violating App Store guidelines, developers can opt for Apple’s payment services or integrate third-party systems without an extra fee. However, if they choose Apple’s in-app payment system, a 3 percent processing fee applies.

Apple maintains oversight over app distribution, mandating all apps to be “notarized” by Apple and limiting developers to a single version across different app stores. The company is adjusting its fee structures, allowing developers to pay no commission in the EU based on their chosen app distribution method.

For apps distributed through the App Store utilizing an alternative payment system, the commission reduces to 17 percent (from 30 percent) on digital goods and services, with a 10 percent rate for apps eligible for Apple’s reduced “small business” rate. An additional 3 percent fee applies if developers opt for Apple’s payment processing system.

Apple introduces a Core Technology Fee for popular apps, charging €0.50 per annual app install after a million annual installs in the EU. Apple estimates that over 99 percent of developers will either reduce or maintain fees under the new terms, with less than 1 percent incurring the Core Technology Fee.

Beyond app stores and payments, Apple opens up other aspects of the iOS ecosystem in the EU. Alternative browser engines to WebKit are allowed, providing users with a choice of alternative browsers. The App Store permits global game streaming services, a shift from previous restrictions. Additionally, Apple prepares to enable NFC payments in third-party apps for developers in the European Economic Area.

The DMA, enacted in 2022, targets alleged anticompetitive practices by tech giants, designating Apple as a “gatekeeper” under its rules. The regulation imposes obligations on app installation, app store uninstallation, default service changes, and interoperability of large messaging services.

Apple joins Amazon, Meta, Microsoft, ByteDance, and Alphabet as DMA-designated gatekeepers. While the changes align with EU regulations, it remains to be seen if vocal critics like Spotify and Epic Games, who contested the “Apple Tax,” will find Apple’s modifications satisfactory. Users in the EU will soon decide the appeal of alternative app stores and payment methods against Apple’s in-house options.