Apple has just dropped a bombshell: it’s changing its iOS platform to comply with the EU’s Digital Markets Act (DMA), which targets the tech behemoths that dominate the digital space. This means that Apple will have to play nice with its competitors and customers, or face hefty fines and sanctions.
What is the DMA and why does it matter?
The DMA is a proposed regulation by the European Commission that aims to ensure fair and open competition in the digital sector. It applies to large online platforms that act as gatekeepers to the digital market, such as Apple, Google, Amazon, and Facebook.
The DMA imposes a set of obligations and prohibitions on these platforms, such as:
The DMA also gives the Commission the power to impose fines of up to 10% of the platform's global annual turnover, or even break up the platform if it repeatedly infringes the rules.
The DMA is expected to be adopted by the end of 2023, after a lengthy legislative process involving the European Parliament and the Council of the EU. However, some platforms, such as Apple, have already started to make changes to comply with the DMA ahead of time.
How is Apple complying with the DMA?
Apple is not wasting any time: it’s already rolling out iOS 17.4 beta to help developers get ready for the big changes. The DMA requires Apple to allow sideloading of apps, among other things. This means that users can install apps from sources other than the App Store, which could threaten Apple’s monopoly and revenue. Apple has until March 7 to comply, or else…
Here are some of the major changes that Apple is making to its iOS platform in response to the DMA:
Changes for Developers in the European Economic Area (EEA)
Apple is giving iOS developers in the EEA some new options and tools to distribute their apps from alternative app stores. This includes new APIs, tools for creating alternative app stores, and frameworks for alternative browser engines. Developers can also use an interoperability request form to ask for compatibility with iPhone and iOS features.
Sounds good, right? Well, there’s a catch…
The DMA is a proposed regulation by the European Commission that aims to ensure fair and open competition in the digital sector. It applies to large online platforms that act as gatekeepers to the digital market, such as Apple, Google, Amazon, and Facebook.
The DMA imposes a set of obligations and prohibitions on these platforms, such as:
- Allowing users to uninstall pre-installed apps and choose their own default apps
- Allowing third-party app stores and sideloading of apps
- Providing access to core platform services and interoperability with other platforms
- Not using data from business users or competitors to gain an unfair advantage
- Not discriminating between their own services and those of their rivals
The DMA also gives the Commission the power to impose fines of up to 10% of the platform's global annual turnover, or even break up the platform if it repeatedly infringes the rules.
The DMA is expected to be adopted by the end of 2023, after a lengthy legislative process involving the European Parliament and the Council of the EU. However, some platforms, such as Apple, have already started to make changes to comply with the DMA ahead of time.
How is Apple complying with the DMA?
Apple is not wasting any time: it’s already rolling out iOS 17.4 beta to help developers get ready for the big changes. The DMA requires Apple to allow sideloading of apps, among other things. This means that users can install apps from sources other than the App Store, which could threaten Apple’s monopoly and revenue. Apple has until March 7 to comply, or else…
Here are some of the major changes that Apple is making to its iOS platform in response to the DMA:
Changes for Developers in the European Economic Area (EEA)
Apple is giving iOS developers in the EEA some new options and tools to distribute their apps from alternative app stores. This includes new APIs, tools for creating alternative app stores, and frameworks for alternative browser engines. Developers can also use an interoperability request form to ask for compatibility with iPhone and iOS features.
Sounds good, right? Well, there’s a catch…
Core Technology Fee and Business Terms
Apple is not giving up its slice of the pie that easily. It’s introducing a new business term in Europe called the “Core Technology Fee”. This means that developers who choose to distribute their apps via alternative app stores will have to pay Apple €0.50 for each first annual install over a 1 million threshold.
Apple claims that this fee is justified by the value it provides, such as distribution on the App Store, secure payment processing, and a trusted mobile platform. But is it really fair?
Fee Reductions and Payment Processing
Apple is also cutting its commission on digital purchases in the App Store, from 30% to 17%. This is a nice gesture, but it comes with a 3% processing fee for developers who use Apple’s payment tech. However, developers can also choose alternative payment service providers without paying extra.
This could be a game-changer for the app economy, as it could lower the prices and increase the choices for consumers.
Security Concerns and Risks for iOS Users
Apple is not happy about the DMA, and it’s not shy about expressing its concerns. In a briefing with journalists, Apple warned about the security risks of sideloading, saying that it could expose users to malware and privacy breaches. Apple argues that allowing iOS apps to install other apps on user devices could be a gateway for hackers and scammers.
Is Apple genuinely worried about user safety, or is it just trying to scare people away from sideloading?
DMA Compliance Assessment and Potential Consequences
The European Commission will be the judge of whether Apple’s changes are enough to comply with the DMA. If not, Apple could face fines of up to 10% of its global annual turnover, which is a lot of money. Apple also has to prove that its business terms are fair, reasonable, and non-discriminatory, which could be hard to do given its history of antitrust lawsuits and investigations.
Additional Platform Features
Apple is not all doom and gloom, though. It’s also adding some new features to its platform, such as notarization for iOS apps, app installation sheets, authorization for marketplace developers, and enhanced malware protections. These features are meant to provide more security and protection for users and developers, as well as more transparency and accountability for Apple.
How did Epic Games react to Apple's announcement?
Epic Games, the maker of Fortnite and Apple’s arch-nemesis, was quick to react to Apple’s announcement. It called Apple’s EU offering a “malicious compliance” filled with “junk fees”. Epic Games has been suing Apple over its App Store policies, accusing it of abusing its market power and stifling competition.
Epic Games also launched a campaign called “Free Fortnite”, urging users to boycott Apple and switch to other platforms. Epic Games claims that Apple’s changes are not enough to restore fair competition and innovation in the app market.
Apple is not giving up its slice of the pie that easily. It’s introducing a new business term in Europe called the “Core Technology Fee”. This means that developers who choose to distribute their apps via alternative app stores will have to pay Apple €0.50 for each first annual install over a 1 million threshold.
Apple claims that this fee is justified by the value it provides, such as distribution on the App Store, secure payment processing, and a trusted mobile platform. But is it really fair?
Fee Reductions and Payment Processing
Apple is also cutting its commission on digital purchases in the App Store, from 30% to 17%. This is a nice gesture, but it comes with a 3% processing fee for developers who use Apple’s payment tech. However, developers can also choose alternative payment service providers without paying extra.
This could be a game-changer for the app economy, as it could lower the prices and increase the choices for consumers.
Security Concerns and Risks for iOS Users
Apple is not happy about the DMA, and it’s not shy about expressing its concerns. In a briefing with journalists, Apple warned about the security risks of sideloading, saying that it could expose users to malware and privacy breaches. Apple argues that allowing iOS apps to install other apps on user devices could be a gateway for hackers and scammers.
Is Apple genuinely worried about user safety, or is it just trying to scare people away from sideloading?
DMA Compliance Assessment and Potential Consequences
The European Commission will be the judge of whether Apple’s changes are enough to comply with the DMA. If not, Apple could face fines of up to 10% of its global annual turnover, which is a lot of money. Apple also has to prove that its business terms are fair, reasonable, and non-discriminatory, which could be hard to do given its history of antitrust lawsuits and investigations.
Additional Platform Features
Apple is not all doom and gloom, though. It’s also adding some new features to its platform, such as notarization for iOS apps, app installation sheets, authorization for marketplace developers, and enhanced malware protections. These features are meant to provide more security and protection for users and developers, as well as more transparency and accountability for Apple.
How did Epic Games react to Apple's announcement?
Epic Games, the maker of Fortnite and Apple’s arch-nemesis, was quick to react to Apple’s announcement. It called Apple’s EU offering a “malicious compliance” filled with “junk fees”. Epic Games has been suing Apple over its App Store policies, accusing it of abusing its market power and stifling competition.
Epic Games also launched a campaign called “Free Fortnite”, urging users to boycott Apple and switch to other platforms. Epic Games claims that Apple’s changes are not enough to restore fair competition and innovation in the app market.
Conclusion
Apple’s EU compliance is a big deal for the app world, as it will affect millions of users and developers across Europe and beyond. It will also have implications for other platforms that are subject to the DMA, such as Google and Amazon.
While some of Apple’s changes may seem positive and beneficial, others may raise questions and concerns about the fairness and security of the app ecosystem. It remains to be seen how the DMA will impact the app industry and the user experience in the long run.
Apple’s EU compliance is a big deal for the app world, as it will affect millions of users and developers across Europe and beyond. It will also have implications for other platforms that are subject to the DMA, such as Google and Amazon.
While some of Apple’s changes may seem positive and beneficial, others may raise questions and concerns about the fairness and security of the app ecosystem. It remains to be seen how the DMA will impact the app industry and the user experience in the long run.
Author
-Anurag
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