Apple loosens its grip on the app store for European iPhone users, creating a big change in its strategy"

 

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Apple announced its plans to open  its own  iPhone App Store in Europe to competitors on Thursday, a move that opens up cracks in the company’s famous “walled garden,” with which it controls app distribution on its devices

Apple CEO Tim Cook attends the “Senior Chinese Leader Event” held by the National Committee on US-China Relations and the US-China Business Council on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 15, 2023.

Apple announced plans to open up its iPhone App Store in Europe to competitors on Thursday, a move that opens up cracks in the company’s famous “walled garden,” with which it controls app distribution on its devices.

Apple didn’t make these moves voluntarily — the changes were required by a new European law, the Digital Markets Act, which forces big tech companies to open up their platforms by March of this year.

remain on the same business terms in place today if they prefer,” Schiller said in the statement.

Here are the new business terms, according to Apple:

• iOS apps on the App Store under the new terms will pay Apple between 10% and 17% of total digital sales, depending on whether they’re subscriptions or if the app makes a small amount of money.
• Apps distributed through an alternative app store won’t get a full review for content, like App Store apps receive, but they won’t have to pay any commission to Apple.
• iOS apps in Europe under the new rules can still opt to use Apple’s in-app purchasing software for a 3% fee.
• Apple will charge an annual fee of half a euro for each first-time app installation over 1 million users, which it says will cover some of the costs of Apple developing software and distributing apps.
• The “Core Technology Fee” applies if the apps are downloaded through a third-party app store or Apple’s app store. Developers can distribute their apps on both the App Store as well as third-party alternatives at the same time, and the fee covers installs on both. As many as 1 million accounts in Europe can download an app each year before Apple starts charging its fee.

The DMA has been in the works for years. Spotify, among other companies, lobbied heavily for it starting in 2019. It goes into effect in March, but other parts of Apple’s business could come under scrutiny as the European Commission continues to examine Apple’s business practices — in particular, it may focus on making Apple’s iMessage service interoperable with competitors.

On Thursday, Apple also made changes to the way it makes its digital wallet technology accessible, as well as allowing competitors to use different underlying web browser technology.

Earlier this month, Margrethe Vestager, the European Commission antitrust chief, visited Apple CEO Tim Cook in California. She posted on social media that they had discussed Apple’s compliance with the law.

Epic Games CEO Tim Sweeney posted on social media on Thursday that Apple’s plan was a “devious new instance of malicious compliance,” arguing that its new business terms amounted to “junk fees.” Epic Games sued Apple in the U.S. over antitrust and similar App Store restrictions in 2020, mostly losing, and the Supreme Court declined to hear appeals earlier this month.