It seems that Apple is on the cusp of unveiling policy changes in response to the Digital Markets Act (DMA) in Europe. The DMA, enacted by the European Union in 2022, serves as a regulatory framework aimed at curbing anticompetitive practices, particularly focusing on Apple’s dominant control over app distribution through its App Store. Now, a new report by The Wall Street Journal, says that the tech giant plans to bring a host of new fees and restrictions on developers who plan to offer their apps outside the App Store in the European Union.
The report alludes to Apple’s intention to levy fees for sideloaded apps, drawing parallels with its approach to external links for alternative payment systems in the US. Developers in the US are currently subject to a 27% commission for first-year subscriptions initiated through external links. The specific mechanisms by which Apple intends to review apps not distributed through the App Store remain veiled in uncertainty, although it will ensure that Apple has a closer eye on the apps downloaded outside the App Store.
At the heart of the DMA lies a mandate that confronts major tech “gatekeepers,” including Apple, urging them to adhere to regulations fostering fair competition. Effective March 7, 2023, the legislation introduces transformative alterations to how apps are distributed on iOS devices, with a pronounced emphasis on sideloading and the inclusion of third-party app stores. A pivotal facet of the DMA is the introduction of sideloading, a departure from Apple’s traditional walled-garden approach. Sideloading empowers users to download and install apps from sources outside the App Store, challenging Apple’s longstanding monopoly over app distribution.
However, recent insights from the Wall Street Journal suggest that Apple’s response to sideloading may not align entirely with expectations. While the prospect of apps being available outside the App Store is on the horizon, Apple purportedly plans to retain control by imposing fees and implementing app review processes for sideloaded apps. This introduces complexities and prompts critical inquiries into the extent of Apple’s concessions and the DMA’s intended impact.
Anticipated modifications in Apple’s policies have triggered apprehensions among developers who harbored optimism about the DMA ushering in a more open and competitive environment. Developers, initially hopeful for a relaxation of Apple’s restrictions and high commissions, may now grapple with challenges in navigating a landscape where fees and oversight persist. Apple’s reported stance could lead to increased scrutiny from developers and regulatory authorities as well. Furthermore, with the new restrictions, developers may face an additional financial burden with Apple’s purported intention to charge fees for sideloaded apps. This could impact the revenue models of developers, particularly those relying on alternative payment systems or subscription-based services.
Ahead of the DMA deadline, other companies are stepping up as well. In anticipation of the new DMA rules, Meta Platforms (formerly Facebook), Spotify, and Microsoft are proactively positioning themselves for the changing landscape. Meta contemplates allowing users to download apps directly from Facebook ads. Spotify envisions offering direct downloads from its website, while Microsoft explores the potential launch of its third-party app store for games.
