January 28 update below. This post was first published on January 25, 2024.
Have you downloaded Apple iOS 17.3? The first developer beta, for iOS 17.4 is landing today, January 25. And it includes big changes coming for the iPhone and the App Store in Europe. Apple even told us when it’s coming: in March. Here’s what we’ve learnt—and why it’s important for U.S. users, too.
The unexpected announcement ties in with an upcoming deadline in the European Union of March 7, for companies to comply with something called the Digital Markets Act.
MORE FROM FORBESiOS 17.3: Apple Releases iPhone Update With Must-Have New FeatureBy David Phelan
Apple’s news came in a post on Apple Newsroom and explains what’s changing. For a start, iPhone users in the EU will be able to download and install apps outside the App Store, something Apple has previously fought against and was impossible unless you had an iPhone that was jailbroken.
With this news, from March, other app stores will be possible, which is very big news. Any developer can set an app marketplace up, though it has to meet Apple’s rules for customer experience, fraud prevention and more. Apple is creating Application Programming Interfaces. These APIs are what let different pieces of software talk to each other and in this case will mean that an external app marketplace can function as an iOS app that is able to install other apps onto your device.
MORE FROMFORBES ADVISOR
Things will suddenly be much more like they are on the Mac, where apps can be downloaded from sources outside the Mac App Store. Apple has always had an iron hold on ensuring the user experience isn’t downgraded and that there are no security issues resulting from direct downloads.
Apps coming from the alternative app stores will have to go through a notarization process including safety and security checks.
With this news comes another big change. Apps from external marketplaces will not be subject to the 30% commission fee most apps attract. Instead, Apple will charge a Core Technology Fee of 54c (0.5 Euros) per install per account each year. This fee only comes into play after 1 million installs have taken place. This could mean cheaper apps, and many more of them than there are at the moment (although, you know what, there are plenty already).
App developers can still choose to distribute through the App Store as now, but with significantly reduced commission, 17%, plus 3% for using Apple’s payment system rather than an alternative payment system, something which will also come with the new rules. NFC payments not using Apple Pay or the Wallet app will arrive, thanks to something called Host Card Emulation.
WebKit will not be required for browser apps from third parties, either, so alternative browser engines will suddenly be possible.
So, why is all this important outside the EU? While the changes are only for European markets, you can bet the U.S. government, already eyeing Apple and its App Stores carefully, will be watching what happens before taking action of its own.
If it works in Europe, you can bet the U.S. authorities will want to introduce changes as sweeping as this in America, too.
January 26 update. The Apple announcement of how it will comply with the Digital Markets Act with its March 7 deadline was detailed and complex, to say the least. So, it’s no surprise that the ground is still settling in the aftermath.
For instance, would the Act, which is not entirely dissimilar to legislation working its way to implementation in the U.K., mean that Apple would apply the changes for British users as well? After all, although the U.K. left the EU several years ago, we could have been considered as part of the European market in Apple’s eyes.
The answer is no. Apple has made clear that it’s introducing the changes because it is required to by the EU, and that it doesn’t see the results to be as safe for its users, so it’s not going to expand where it affects an inch further than it has to. The countries affected are strictly those in the European Economic Area, meaning the 27 countries in the EU and additionally Iceland, Liechenstein and Norway. Switzerland is part of the single market but not in the EEA.
Just as important as the alternative app stores provisions are alternative payment options, and developers can integrate them into their apps, for instance. Similarly, the move to allow NFC payments which do not require Apple Pay or the Wallet app is a very big one—though I suspect a lot of people will be happy to stick to Apple Pay with its unblemished security.
Apple iPhone users have been able to select a default search engine for some years now, and users in the EU will be able to choose a default browser. There are already other browsers available, such as Chrome, Firefox and Microsoft Edge, but it’ll be easy to make it a default choice.
Since the release, there has been criticism of the Core Technology Fee which is proposed, saying that it could bankrupt some apps, or be expensive for apps like Spotify with millions of users.
There’s still more to learn about this new development, so please check back.
January 28 update. Reaction to the new moves by Apple to comply with the Digital Markets Act for users in the European Union continues apace—and it’s not all good.
The reliably incisive John Gruber described the DMA as anti-U.S.-big-business. “There are aspects of it that seem written specifically for Spotify, in fact… I do not think the DMA is going to change much, if anything at all, for the better for iOS users in the EU.” He describes the DMA as a “terrible law.”
He discusses the Core Technology Fee and says “Effectively, Apple is saying that their fair share of App Store distribution is 17/10 percent, and that Apple’s own App Store payment processing is worth an additional 3 percent. (3 percent is almost indisputably a fair estimate for the cost of payment processing alone.) And, that’s why apps distributed outside the App Store will only pay Apple the CTF, with no commission on sales. The commissions under the new EU rules are only for the App Store, so apps from marketplaces don’t pay them. The Core Technology Fee is how Apple proposes monetizing the value provided by iOS itself.”
And he believes there will be practical effects for users, saying, “Apple’s overriding concern is surely control. Control encompasses all of Apple’s concerns, from their own revenue to users’ experiences. Any form of compliance with the DMA necessarily implies Apple losing some control over the iOS platform. (Any users who switch from Safari, or any other WebKit-based browser, to a browser using Google Chrome’s Blink or Mozilla’s Firefox/Gecko rendering engines are almost certainly going to see an adverse hit to battery life.”
Will all the commentary affect what Apple releases in early March? Not straight away, for sure, but there may be tweaks possible down the line. More as we have it.
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Apple iOS 17.4 and Changes for the iPhone and App Store in Europe
The article discusses the release of Apple iOS 17.4 and the changes it brings for iPhone users in Europe. These changes are related to the Digital Markets Act, a deadline set by the European Union for companies to comply with certain regulations. Here are the key points mentioned in the article:
Downloading and Installing Apps Outside the App Store: iPhone users in the EU will be able to download and install apps from sources outside the App Store. Previously, this was only possible through jailbreaking. Starting from March, other app stores will be allowed, as long as they meet Apple's rules for customer experience, fraud prevention, and more.
Application Programming Interfaces (APIs): Apple is creating APIs that will allow external app marketplaces to function as iOS apps. This means that these marketplaces will be able to install other apps onto users' devices.
30% Commission Fee: Apps from external marketplaces will not be subject to the 30% commission fee that most apps attract in the App Store. Instead, Apple will charge a Core Technology Fee of 0.5 Euros per install per account each year, but only after 1 million installs have taken place.
Reduced Commission for App Store Distribution: App developers can still choose to distribute their apps through the App Store, but with a significantly reduced commission of 17%, plus an additional 3% if they use Apple's payment system instead of an alternative payment system.
NFC Payments and Host Card Emulation: The new rules will allow NFC payments that do not require Apple Pay or the Wallet app. This means that alternative payment options will be possible.
Alternative Browser Engines: Third-party browser apps will no longer be required to use WebKit. This means that alternative browser engines, such as Google Chrome's Blink or Mozilla's Firefox/Gecko, will be possible.
Significance for U.S. Users
While the changes mentioned in the article are specific to European markets, the article suggests that the U.S. government, which has been closely monitoring Apple and its App Stores, may take similar actions if the changes prove successful in Europe. The article speculates that if the changes work well in Europe, the U.S. authorities may consider introducing sweeping changes of their own.
It's important to note that the information provided is based on this article. If you need more specific details or have any other questions, feel free to ask!