As expected, Apple’s “revolution” has arrived. Starting next March, after 16 years, the App Store will no longer be the only way to install apps on iPhones and iPads, at least in Europe.
To comply with the Digital Markets Act (DMA), the European regulation designed by lawmakers to ensure fair and open digital markets, Apple has announced the arrival of sideloading for applications, the possibility of using alternative browser engines to Webkit, the opening of NFC also to alternative payment systems to Apple Pay and a lowering of the fees required for developers. All these new features will arrive with iOS 17.4 and iPadOS 17.4 of which the first beta has been released.
All this, the Cupertino company points out, “will still increase the risks for users” although, for each change put in place, Apple is also introducing new safeguards that “reduce, but do not eliminate”, these new risks that the DMA poses to EU users. With these steps, Apple will continue to deliver the best and most secure experience possible to EU users.
There are 27 EU countries affected by all these changes: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. In other parts of the world, everything will remain the same.
“Apple doesn’t offer these changes outside the EU because this isn’t the safest system for our users. We’ve been very clear about the new threats introduced by the DMA, including increased risks of malware, fraud and scams, illegal and questionable content, and Apple’s reduced ability to respond to and remove malicious apps. The changes required by the DMA also involve new technologies and processes that have not been tested and may require further development.”
The changes for EU apps reflect the European Commission’s designation of iOS, Safari and the App Store as “core platform services” under the Digital Markets Act. In March, Apple will share new resources to help EU users understand the changes they can expect and best practices for dealing with “new risks associated with app downloads and payment processing outside the App Store.”
One of the main innovations concerns “sideloading”, i.e. the ability to download, install and update apps on iPhone and iPad not only through the App Store but also through third-party stores. Starting March 7, developers will be able to offer applications on their own virtual store or on third-party marketplaces, which can also be chosen as default in the settings.
These alternative app marketplaces will function as an iOS app and allow you to install other iOS apps on an iPhone or iPad. Any developer will be able to create their own app marketplace as long as a set of criteria are met in terms of customer experience, fraud prevention, customer support, and more. Apple will offer developers a new framework and APIs for creating alternative app marketplaces.
In order to build a marketplace, developers will need to provide Apple with a letter of credit from an A-rated financial institution (or equivalent from S&P, Fitch, or Moody’s) of €1,000,000 to establish adequate financial means to provide financial support to both other developers and users. This letter of credit will be automatically renewed on an annual basis.
When an app developer submits an app to Apple for distribution, they can choose to make it available on both the App Store and any alternative app marketplace. Apps that will be installed through alternative app stores, however, will need to go through an authentication process that includes a number of security checks, similar to how you do on Macs with File Valut.
Apple will not charge fees on apps installed through alternative marketplaces, nor will it charge fees for alternative payment systems. Developers will also be able to integrate an alternative payment process into their app or links to websites where users can make a purchase at no additional cost to Apple.
While there are no fees for app marketplaces and alternative payment systems, Apple has still provided a “Core Technology Fee” of €0.50 per install per account on an annual basis. The first million installs are free for all developers, but after 1 million installs, the fee will have to be paid.
Apple, therefore, will not charge the first million “first annual installs” per iOS account every year, but after that developers will start accumulating costs. A free or freemium app that will go “viral” and is downloaded more than a million times, in practice, could be forced to pay very high fees.
Apple today also announced the new commercial terms available for developer apps in the European Union. Developers will be able to choose to adopt these new commercial terms or remain on Apple’s existing terms. Developers must adopt the new EU app commercial terms to use the new alternative distribution or alternative payment processing features.
In summary, the new trade terms for iOS apps in the EU are characterized by three elements:
Reduced fee – iOS apps on the App Store will pay a reduced fee of 10% (for the vast majority of developers and for subscriptions after the first year) or 17% on digital goods and services transactions.
Payment Processing Fee – iOS apps on the App Store can use App Store payment processing for an additional 3% fee. Developers can use a payment provider within their app or connect users to their website to process payments without additional fees to Apple.
Core Technology Fee – iOS apps distributed from the App Store and/or an alternative app marketplace will pay €0.50 for each first annual installation above the 1 million threshold.
Of course, Apple argues that no matter where and how an app is distributed, it will need to meet a number of authentication requirements. Through this process, apps will receive an installation key, go through a series of automated checks, and go through what Apple describes as “a basic human review.”
Apple points out that Notarisation, the “notarization” of apps, will control:
Accuracy: Apps should accurately represent the developer, features, and costs to users.
Features: Binaries must be reviewable, free of serious bugs or crashes, and compatible with the current version of iOS. They may not manipulate software or hardware in ways that negatively impact the user experience.
Security: Apps may not promote physical harm to the user or the public, and may not allow the distribution of malware or suspicious or unwanted software. They can’t download executable code, read outside the container, or direct users to lower the security of their system or device. In addition, apps must ensure transparency and allow user consent to allow any party to access the system or device or reconfigure the system or other software.
Privacy: Apps may not collect or transmit private and sensitive data without the user’s knowledge or in a manner contrary to the stated purpose of the software.
Unlike the classic App Store overhaul, authentication won’t impose quality or content standards. There will be a system sheet for an authenticated app that shows the app’s name, screenshots, and more so that a user can verify an app’s information before choosing to install it.
Apple plans to encrypt and sign all iOS apps destined for alternate distribution to ensure that users receive apps from known parties and to protect developers’ intellectual property.