Apple’s App Store has long been the subject of criticism and controversy, with some arguing that its tight control over what apps users can download on their iPhones and iPads stifles competition and innovation. This week, however, reports emerged that Apple is set to loosen its grip on the App Store in Europe, allowing users to “sideload” software through independent, third-party app stores.
The move comes as European Union authorities pass a raft of new laws designed to curb the power of tech giants like Apple. The EU’s Digital Markets Act (DMA), which takes effect in the coming months, aims to open up digital platforms to more competition and give users more leeway to change default settings. Under the DMA, companies will also be required to allow in-app purchases without taking a slice of the payments. Companies will have to conform to the DMA by 2024, and those that repeatedly violate it could be fined up to 20% of their annual global revenue – a potentially hefty penalty for a company like Apple, whose annual revenue is worth billions of dollars.
According to Bloomberg, Apple engineers and services employees are working on changes to the App Store that would open it up to apps from third-party app stores, with the changes set to roll out with iOS 17 next year. It’s not yet clear whether these changes will be available only in the EU or whether Apple may eventually open up its App Store rules worldwide.
The news will be welcome to companies like Match Group (which owns Tinder and Hinge), Spotify, and others that have been subject to Apple’s commissions on in-app purchases, which can range from 15% to 30%. According to Sensor Tower data cited by Reuters, nearly $10 billion worth of transactions took place through the App Store last year.
The move by Apple marks a significant shift in its business practices and a surprise concession to European market regulators. It’s not the first time that Apple has bent to EU laws – in 2023, the company announced that it was testing the USB-C connector rather than the Lightning connector for its next generation of iPhones in compliance with EU rules.
The changes to the App Store could also boost app store sales for other platforms like Microsoft, Meta Platforms, and Amazon, which have their own versions of app stores. It remains to be seen whether the changes will be enough to satisfy critics like Elon Musk, who recently attacked Apple’s App Store policies and accused the company of being a “monopoly.”