Apple allows third-party app stores for iPhone, but only in the EU

Apple announced that it will allow the installation of third-party applications by bypassing the App Store. The company will allow third-party app stores to be installed on iOS to comply with the European Digital Markets Act (DMA), which will break the App Store monopoly. Changes will occur with the release of iOS 17.4 in March. True, they will only affect users from the European Union — in other regions everything will remain as it was.

EU users updating to iOS 17.4 will be able to download a third-party app store from the store's official website. These services will need to go through Apple's approval process to be used on iPhone.. By installing one of the “alternative app marketplaces,” as Apple itself calls them, the user will have to explicitly give it permission to download apps to their device. But once the marketplace is approved and on the device, users will be able to download whatever they want, including applications that are not available in the App Store and violate the rules of the latter. You can even choose a third-party marketplace as the default app store for your iPhone.

Developers, in turn, will be able to choose whether to use Apple payment services for in-app purchases or integrate a third-party payment system at no additional cost to Apple.. If a developer wants to use the existing payment system in Apple applications, he will pay an additional commission of 3%.

Apple still plans to closely monitor the app distribution process. All apps must be approved by Apple, and distribution through third-party marketplaces will continue to be controlled by Apple systems. Developers will only be allowed to distribute one version of their app across different app stores, and they will still have to meet some basic platform requirements, such as being scanned for malware.

Image Source: Unsplash/James Yarema

Apple will give developers more freedom not only in terms of how they distribute applications, but also in terms of how they accept payments from users.. The main thing: the company will allow the use of third-party payment systems for in-app payments for digital goods and services. Links to external payment systems will also be allowed — users can complete payment for digital goods and services on the developer’s website. At the same time, it is now allowed to inform EU users about promotions, discounts and other offers available outside of applications.

But at the same time, Apple will require that developers on the pages of their applications in the App Store tell users that the application uses alternative payment methods. It will also be necessary to inform users that they are no longer transacting through Apple when the developer directs them to an alternative payment system. Apple noted that it will verify that developers accurately report transaction information using alternative payment systems.

Apple is also making changes to its fee structure for EU app developers. In short, in the future, developers will be able to avoid paying commissions to Apple in the European Union if they distribute their applications only through alternative stores and use third-party payment systems. And for applications distributed through the App Store, the commission for in-app payments will be significantly reduced.

Under the new terms, apps distributed through the App Store will have to pay Apple a 17% commission on digital goods and services, which is significantly less than the current 30%. The fee will also drop to 10% for those apps that currently qualify for Apple's small business rate, which the company says is the vast majority of apps.. An additional 3% fee will be charged to developers who choose to use Apple's payment processing system.

And Apple is introducing a new fee for popular applications. The new “Core Technology Fee” will charge developers €0.50 for every first app installation for a year. However, this fee will only begin to apply after one million installations per year in the EU. Apple estimates that more than 99% of developers will «reduce or maintain the amount of compensation they owe Apple» under the new business terms, and less than 1% of developers will pay the core technology fee.

Developers can either choose to do business differently or stick with the existing model and continue to distribute apps through the App Store as usual.