Apple refuses to loosen iron grip on iPhone in Europe

Apple is committed to every aspect of its products. For example, if you want an iPhone app, the only way to get it is through the Apple App Store. But that was then. And this is now. In the European Union (EU), the recently passed Digital Markets Act (DMA) forced Apple to change its ways with the release of iOS 17.4 in March.

But that doesn’t mean Apple will simply relinquish its power.

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The DMA aims to break up what the EU sees as a technology monopoly held by several American tech giants, including Apple, Google, Facebook, Microsoft and Amazon, as well as TikTok’s parent company, China’s ByteDance. For Apple, this means iPhone users will need to allow their apps to be sideloaded using other web browsers, alternative payment systems to Apple Pay, and non-Apple App Stores. .

Instead, Apple is doing everything it can to prevent both developers and users from using these new freedoms. To quote Apple:

The DMA is calling for changes to this system that pose significant risks to users and developers. This includes new avenues for malware, scams and scams, illegal and harmful content, and other privacy and security threats. These changes also compromise Apple’s ability to detect, prevent, and take action against malicious apps on iOS and to support users affected by issues with apps downloaded outside the App Store. .

Getting into the details, only Apple-certified developers will be allowed to develop alternative web browsers, and those iOS web browsers will only be available for iOS within the EU. It may seem like there are alternative iPhone web browsers like Chrome and Firefox these days, but they’re just skins on top of Apple’s Safari web browser. That’s why Safari seems to be the most popular mobile web browser.

Web browser companies are well aware that Apple does the bare minimum to comply with the law. Damiano Demonte, a spokesperson for Firefox’s parent company Mozilla, told The Verge that the company believes that the limitation “requires Firefox to build and maintain two separate browser implementations, a burden that Apple itself does not have to incur.” ”, which is why he is dissatisfied with Apple.

Even if you don’t want to use Apple Pay, Apple still gets a cut. iOS apps that use alternative payment methods must pay a 3% customs duty.

When it comes to alternative app stores, you’re surrounded by a moat of restrictions. Vendors looking to sell their apps through alternative channels will need to present a €1 million letter of credit from a leading financial institution before being “eligible” to offer the program. Apple defends this because it shows vendors that they can support their apps while keeping malware agents and scammers out. It will also prevent start-up companies from expanding into the country.

External developers must pay a core technology fee of €0.50 per first annual install of a Marketplace app. An Apple App Store developer can get 1 million installs for free before paying this fee, but those selling through alternative markets must pay the fee immediately.

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Damien Geradin, a law professor at Tilburg University, said the “junk fees” would “disproportionately affect app developers, whose income is limited but whose apps are widely downloaded.”

Spotify CEO Daniel Ek, a longtime critic of the Apple App Store, said that under Apple’s new EU app store rules, App: “Prices can be astronomical”. Imagine this. Popular free apps with tens or hundreds of millions of users in the EU will now be subject to a tax on every download and update each year. Imagine the impact on popular apps like WhatsApp, Duolingo, X, Pinterest, etc. ”

Regarding Spotify, Ek complained:

“Spotify itself faces an unsustainable situation. With Apple’s installed base in the EU reaching 100 million devices, this new tax on downloads and updates will cause customer acquisition costs to skyrocket and potentially has the potential to increase by a factor of 10. Therefore, Spotify will have to stay at . “Maintaining the status quo” is exactly what we have been fighting for for five years. ”

At the same time, Apple says it will waive core technology fees for nonprofits, government agencies, and educational institutions. However, free, open source, or freemium apps are not exempt. Effectively, this means that free iOS apps will no longer exist.

Add all this together, and while Apple won’t get its usual 30% cut from app sales on alternative stores, it will still make money.

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Additionally, Apple restrictions require that independent apps can only be purchased through alternative stores. You cannot sell them from your website. Additionally, only EU companies can sell apps through third-party stores.

By the way, if you’re outside the EU, don’t think for a second that you can buy one of these alternative apps. That won’t happen. Even if you use a virtual private network (VPN), Apple will now check your Apple ID’s billing address, current location, and current region of your device.

At the same time, Apple is trying to accommodate vendors in the EU and encourage them to stay in Apple stores. In the EU, Apple will reduce App Store fees to 17% for most digital goods and services, and 10% for second-year app subscriptions and eligible small business developers.

Needless to say, many software vendors are unhappy with Apple. Epic Games CEO Tim Sweeney, who has long fought Apple’s iron grip on the iOS market, called Apple’s EU proposal an example of “bad compliance.” Full of “junk fees”. ”

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So did Apple do enough? The European Commission, which oversees the DMA, will decide whether Apple meets the law’s requirements. “If the proposed solutions are not sufficient, we will not hesitate to take strong action,” EU industry chief Thierry Breton told Reuters.

Whatever happens in the EU, these changes are unlikely to come to the United States. Apple won an antitrust lawsuit against Fortnite maker Epic Games in January 2024. Without action in Congress, Apple will continue to solve all iPhone problems on this side of the Atlantic.