Mac FORMAT INVESTIGATES
New regulations are changing the way Apple operates in the EU, but their impact could be felt far and wide
The combination of Apple software and hardware have always been something of a closed shop. This is by design. The company argues it has created a walled garden so that it can offer only the best, safest products to customers and allow them to pay in the most straightforward, secure way. Meanwhile, its critics claim that it has created a silo so that it can trap customers in its ecosystem and keep taking a 30% cut of all apps and services purchased through the App Store and through Apple Pay.
Both arguments are true to a certain extent. But, irrespective of who is right, things are changing. When iOS 17.4 is released in March, Apple is going to allow so-called sideloading in the EU because of the bloc’s Digital Markets Act (DMA). This means that app makers will be able to distribute their products via alternative app stores or directly from the web. They will also be able use alternative payment systems.
The most obvious change for consumers is that they will not be limited to products solely from the App Store. However, just as significantly, Apple will also have to make the near-field communication (NFC) technology used in the iPhone and Apple Watch available to third-parties. This means Apple Pay and Apple Wallet will no longer be the only payment app options in the European Economic Area (EEA); users will also be able to set alternative default payment apps and app stores.
The way app developers pay Apple will also change. If a developer chooses to use an alternative payment system for an app in the App Store, the usual 30% commission drops to 10% if the developer qualifies for a ‘small business’ rate, or 17% if they don’t. There is an additional 3% fee for any developer who wants to use Apple’s payment processing system.
Makers of popular apps will be subject to a Core Technology Fee, which charges developers €0.50 the first time anyone installs the app in a 12-month period.
It is hard to overstate what a major change this is. Back in 2021, Apple published a report entitled ‘Building a Trusted Ecosystem for Millions of Apps: Athreat analysis of sideloading’. In it, it said:
“Supporting sideloading through direct downloads and third-party app stores would cripple the privacy and security protections that have made iPhone so secure and expose users to serious security risks.”
The report went on to argue that, amongst other things, sideloading would mean “more harmful apps would reach users because it would be
