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App Store symbol: Will it only be one among many in the future?

Photo: CHRIS DELMAS / AFP

Apple bows to the new rules of the Digital Markets Act (DMA).

In March, the manufacturer wants to give iPhones in the European Union (EU) new options via a software update that were previously unthinkable in the Apple universe.

This includes the fact that the group will in future allow other sources of supply for apps and alternatives to its payment system within the EU in addition to its app store.

In addition, third-party browsers that are not based on Apple technology will be permitted for the first time, the fee structure for app providers will be changed and fees will be reduced.

The fact that Apple is making such major changes to the foundations of its iPhone ecosystem that have seemed cemented for years is because the EU wants to limit the market power of the large digital companies with the DMA.

How much the company is struggling to implement the new rules can be seen very clearly in a newsroom post that the company published on Thursday evening.

»Increased privacy and security threats«

It repeatedly talks about how much the DMA limits Apple's ability to ensure security, data protection, privacy and compliance with its quality standards.

As much as Apple tries to emphasize the benefits of the new opportunities it will offer in the EU in the future, the company is making it clear how dissatisfied it is with the DMA's regulations.

The priority remains to offer users “the best possible and safest experience in the EU and around the world,” it says.

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Phil Schiller's comments are unusually drastic for Apple.

As head of marketing, he was one of the company's defining personalities for many years; today, as an Apple Fellow on the board, he is responsible for the App Store and Apple Events.

On the one hand, the innovations announced today would meet the requirements of the DMA, said Schiller.

On the other hand, they would help protect users in the EU “from the inevitable increased data protection and security threats that this regulation brings with it.”

Alternative »App Marketplaces«

The most noticeable change for users will be new options for getting apps on the iPhone.

With the introduction of iOS 17.4 planned for March, Apple wants to allow alternative app stores on iPhones for the first time and only in the EU.

The company refers to them as “app marketplaces” to make them clearly distinguishable from its own app store.

Ultimately, these are special apps that other apps are allowed to install.

Under pressure from the EU, Apple is deviating from its policy of only allowing app downloads - whether paid or free - from its online shop.

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The company had always justified this regulation by saying that this was the only way to ensure that no harmful apps and content found their way onto Apple devices.

Before new apps and updates are admitted to the App Store, they must complete a partly automated, partly manual approval process and meet strict criteria, including when it comes to content.

In principle, app marketplaces can be offered by all developers - as long as they adhere to Apple's guidelines.

The company mentions measures against fraud and the ability to handle payment disputes and repayments.

Notarized iPhone apps

In addition, alternative app stores on iPhones are only allowed to distribute apps that have successfully completed a new testing process that Apple calls “notarization”.

This is a basic check of apps for stability, security and possible hidden malware, as is also offered by Apple for Mac apps.

This type of testing will be mandatory for all iOS apps in the future.

However, apps that are to be offered in Apple's App Store must then go through its extended testing process.

He, in turn, also assesses apps for compliance with quality standards and is intended, among other things, to prevent pornographic content from reaching the iPhone.

Technology fee for popular apps

Once an app has passed Apple's testing process, its developers in the EU will in future have the choice of offering it either only in the App Store, only in one or more app marketplaces or on both distribution channels.

The fees you have to pay Apple depend on which sales channels and payment options you use.

The simplest variant: you stay with the current system and nothing changes.

However, if they want to use the new EU system, developers must pay a commission of 17 or ten percent to Apple for digital goods and services - which can also be subscriptions that they offer via apps from the App Store.

Previously it was 30 and 15 percent.

If you have the payment billed through Apple, an additional three percent will be added for this service.

This can be saved if you have the payments made through an external service provider or direct users to their website to carry out the money transfer there.

Whether this detour is worthwhile depends on the costs incurred for these alternative billing methods.

Spotify has already announced that it wants to use exactly this opportunity.

But even if the streaming provider distributes its iPhone app via its own or other alternative app marketplaces in the future, Apple will ask it to pay.

Within the EU, the group wants to charge a so-called “core technology fee” of 50 cents per installation per year in the future, regardless of whether the apps reach iPhones via the App Store or an alternative offer.

However, the fee should only be due for developers whose apps are installed more than a million times and who have accepted the new terms and conditions for the EU.

Browsers are becoming independent

In addition to Apple's Safari, other browsers such as Chrome, Edge and Firefox have long been used on iPhones.

So far, however, they have to use Apple's Webkit.

This is a software construct that provides the basic capabilities of the browser.

With the introduction of iOS 17.4 in March, third-party providers in the EU are now also allowed to use other so-called browser engines as a base.

The company's reluctance to take this step can be seen by the fact that it warns that such browsers "could negatively impact the user experience, including impact on system performance and battery life."

Regardless, the first time users open Safari after installing iOS 17.4 in the EU, they will be asked to select their future default browser from a list of options.

According to Apple, this is also due to the requirements of the DMA.

Another change to become DMA-compliant: Within the European Economic Area, app providers will be able to use the iPhone's NFC chip for contactless payments in the future.

In addition to Apple's Wallet, bank apps can also be used for such payments.

These apps will also be able to access technologies such as so-called Field Detect to trigger payments when the iPhone is held against appropriate NFC terminals.

Introduction in March

Probably because the DMA will come into force on March 7th, Apple has announced the introduction of the new functions and options for the beginning of March.

However, developers can download and install a pre-release version of iOS 17.4 starting today.

Apple is also providing a beta version of its developer software Xcode, with which apps can be adapted to the new possibilities.