We need to take a deeper look at what Apple has in store for the future because the app store competition in the EU is about to undergo some major changes. Concerns about Apple’s app store policies, including commission rates, limitations on third-party payment systems, and app approval procedures, have come under heightened scrutiny as a result of continuing regulatory scrutiny and antitrust questions.
Apple announces changes to iOS, Safari, and the App Store.
The updates bring additional possibilities for app distribution and payment processing for developers.
There are now more safeguards in place to lessen the privacy and security concerns posed by the DMA, and users also have access to more disclosures and controls.
California’s Capitol Apple has updated iOS, Safari, and the App Store to conform to the Digital Markets Act (DMA), which will affect developers‘ apps in the EU. Among the updates are 600+ new application programming interfaces (APIs), enhanced analytics for apps, support for different browser engines, and new ways to distribute iOS apps and handle app payments. With each update, Apple introduces further protections that lessen but do not eradicate, the additional dangers that the DMA presents to customers in the EU. By taking these measures, Apple will ensure that its consumers in the EU always have the greatest and safest experience.
With iOS’s expanded payment and app download choices come more opportunities for fraud, illegal material, viruses, and other security and privacy risks. Apple is taking precautions to ensure that customers in the EU have the safest experience possible by instituting measures such as notarization for iOS apps, authorization for marketplace developers, and disclosures on alternative payments. Many dangers persist despite these protections.
Today, developers may start testing new features in the iOS 17.4 beta, and they can read more about these changes on the Apple Developer Support page. Starting in March 2024, users in the 27 EU nations will have access to the enhanced features.
The adjustments we’re revealing today are in line with the EU’s Digital Markets Act and will aid in shielding EU consumers from the inescapable rise in privacy and security risks brought about by this legislation. According to Apple Fellow Phil Schiller, “Providing the greatest, most secure possible experience for our users in the EU and around the world” is our top goal. New features for alternative browser engines, contactless payments, alternative app distribution, alternative payment processing, and more are now available to developers. Importantly, developers have the option to stick with the current business conditions if they so desire.
These updates are in response to the Digital Markets Act designation of iOS, Safari, and the App Store as “core platform services” by the European Commission. This designation affects apps in the European Union. To better inform its customers in the European Union about the upcoming changes, Apple will release new resources in March. What follows is a set of recommendations for how European Union citizens should deal with the additional dangers posed by app downloads and payment processing outside of the App Store, as well as instructions for navigating the less intuitive user experience that the DMA’s changes entail.
Apple also revealed additional streaming game choices, which will be available to developers’ apps worldwide, and more than 50 upcoming reports covering topics such as engagement, commerce, app usage, and more.
EU’s Breton warns Apple of strong measures’ if App Store changes fail.
Thierry Breton, the EU commissioner for internal markets, recently sent a harsh message to tech company Apple, threatening “strong measures” if the App Store’s proposed modifications don’t live up to regulatory requirements. Breton’s comments are part of a larger trend of people talking about how the App Store’s policies affect digital marketplace competitiveness. For the sake of consumer safety and equitable competition, the European Union has been looking closely at how big tech corporations do business.
Apple’s App Store has been under fire for several reasons, including the fact that it charges for in-app purchases and gives app developers access to users’ personal information. The European Union is determined to enforce rules that create a fair playing field and safeguard the interests of companies and consumers in the digital ecosystem, as Breton’s warning shows. What comes out of these talks might change the game when it comes to app distribution in Europe and has serious consequences for Apple.
New Business Terms for Apps in the EU
Additionally, Apple has announced new business terms that app developers in the EU can take advantage of immediately. Alternatively, developers can continue using Apple’s current terms of service and reject the new ones. Apps developed for the European Union must comply with new business rules to take advantage of the additional features, such as alternate distribution and payment processing.
Apps in the EU must adhere to new business rules to meet the demands of the DMA regarding alternate distribution and payment processing. That includes a pricing model that accounts for all the ways Apple helps developers make money, such as the App Store’s discovery and distribution features, the App Store’s safe payment processing, Apple’s reliable and protected mobile platform, and the resources to create and share groundbreaking apps with people all over the globe.
There will be no disruption to the EU App Store’s secure payment processing for developers who operate under either set of business agreements. The two sets of business conditions mirror Apple’s ongoing efforts to ensure that developers have the greatest possible experience in the app ecosystem.
If they want to publish their iOS apps through the App Store or another marketplace, developers can do so under the new business terms. The App Store on all of Apple’s platforms gives these developers the option to utilize other payment processors for their EU apps.
In the European Union, new commercial agreements for iOS applications include three parts:
- Apps for iOS devices sold through the App Store will have to pay a lower commission rate of either 10% (for most developers and subscriptions after the first year) or 17% on sales of digital goods and services.
- The App Store’s payment processing adds 3% to the price of iOS apps sold through the store. At no extra cost to Apple, developers can integrate a third-party payment processor inside their app or direct customers to their website to complete purchases.
- Core Technology Fee: iOS applications that are made available through the App Store or another app store will be charged €0.50 for every initial annual install, up to a limit of 1 million.
App developers in the European Union who accept payments through a PSP or a website link will have their commission reduced by 3% for apps for iPadOS, macOS, watchOS, and tvOS.
Changes to Safari
Users of Apple’s iOS already have the option to make a different web browser, not Safari, their default. In addition, with iOS 17.4 and later, Apple is adding a new choice screen that will appear when users launch Safari, reflecting the requirements of the DMA. On that page, users in the European Union will be allowed to set a default browser.
Due to the demands of the Digital Marketplace Authority (DMA), users in the European Union will now see a list of default browsers before they can learn about their options. Additionally, the screen impedes the user experience for EU users when they initially launch Safari to navigate to a webpage.
Changes to the App Store
The modifications that the tech company is sharing with developers in the EU through the App Store will have an impact on apps on all of Apple’s operating systems—iOS, iPadOS, macOS, watchOS, and tvOS. Among the updates are additional warnings for EU customers about the dangers of not using Apple’s secure payment processing when purchasing in the App Store.
These modifications are for developers:
- A developer’s app now has more ways to integrate payment service providers (PSPs) for digital products and services.
- A new method of payment processing called “link-out” has just been introduced. This allows customers to buy digital goods and services directly from the developer’s website. In addition, developers can notify EU consumers about sales, discounts, and promotions that aren’t directly related to their apps.
- Tools for business planning—to help developers comprehend KPIs related to Apple’s new business terms for apps in the EU and anticipate fees.
Along with these updates come new measures to educate and safeguard users in the EU, such as:
- Products in the program store have labels that let customers know if the program they’re downloading accepts different payment methods.
- When a developer redirects a user to use a different payment processor, app users will see a disclosure sheet in-app that lets them know.
- Updates to the App Review procedures have been implemented to ensure that developers properly disclose details on transactions that utilize non-traditional payment processors.
- Users in the European Union may now access more data about their App Store activity and export it to a third party through Apple’s Data & Privacy portal, thanks to expanded data portability.
Apple will have fewer resources to assist users who have problems, fraud, or scams with apps that utilize alternative payment processors, and they will not be able to grant refunds for these apps. There will be no record of these purchases in the App Store’s helpful services like Report a Problem, Family Sharing, or Ask to Buy. There is a higher risk of financial data theft if users are required to disclose their payment information to more parties. Only purchases made within the App Store’s in-app system will be reflected in users’ purchase histories and subscription management on the App Store.
Conclusion
Apple has announced changes to its app store in the European Union (EU) to comply with the Digital Markets Act (DMA). The changes include over 600 new APIs, expanded app analytics, functionality for alternative browser engines, and options for processing app payments and distributing iOS apps. Apple is introducing new safeguards to reduce privacy and security risks, such as notarization for iOS apps, authorization for marketplace developers, and disclosures on alternative payments. The changes reflect the European Commission’s designation of iOS, Safari, and the App Store as “core platform services” under the DMA. The EU’s Commissioner for Internal Markets, Thierry Breton, has warned Apple of potential “strong measures” if the changes fail to meet regulatory expectations.
FAQS
Who is Apple’s biggest customer?
Apple has traditionally enjoyed the highest popularity in the US. Nearly half of all revenue comes from the American continent. Net sales of $40.88 billion were generated in the Americas during Q2 2022.
What is Apple transfer pricing in Ireland?
Apple’s tax structure
Apple was able to avoid paying taxes in Ireland because the country’s tax decisions supported a transfer pricing strategy that disregarded economic realities when allocating internal profits. What we call “transfer pricing” are the fees associated with group purchases.