Revolution or Facade? Apple Allows Alternative App Stores

Apple Responds to EU Regulations: The company will allow apps to be sourced from alternative marketplaces in the future. We take a critical look at the opportunities and hidden pitfalls behind Apple’s new App Store policies.

Apples' App Store Symbol auf dem iPhone-Display.
The well-known blue App Store icon, so far the only official portal for iPhone apps, could be joined by third-party app stores in future iOS versions.

Apple has made a significant announcement detailing its plans to comply with the Digital Market Act (DMA) – the European Union’s legislation on digital markets.

The Digital Market Act aims to promote fair competition in digital markets by regulating the power of dominant platforms and improving interoperability and access for smaller companies.

The changes Apple is expected to introduce in the upcoming iOS 17.4 or iOS 18 version not only involve updated business terms and fee structures for developers in the App Store but also the admission of alternative app stores to the iOS ecosystem.

These measures represent a significant departure from Apple’s previous policy and signal an adjustment to the EU’s demands for more openness and competition in the digital market.

Diversity vs. Regulation: The Hidden Pitfalls Behind the New iOS App Store Policies

A central component of Apple’s response to the DMA policy is the admission of independent app stores. This decision could theoretically pave the way for more diversity and competition in the iOS ecosystem.

Developers and businesses will have the opportunity to offer iOS apps through alternative marketplaces, potentially reducing the dominance of the Apple App Store. However, the conditions for setting up such alternative app stores are strict.

One of the most significant requirements is the need for a guarantee from companies wishing to operate an alternative app store. This hurdle could deter smaller companies and startups, thus limiting access to this new opportunity.

Notarization as a Key to the iOS Ecosystem for Third Parties

An important aspect often overlooked in the discussion about admitting alternative app stores on iOS is the notarization process required by Apple for applications.

Even though apps can now be distributed through alternative marketplaces, they must still undergo a notarization process set by Apple. This step is crucial to ensuring the security and trustworthiness of the apps but could be a disappointment for companies hoping to distribute their applications freely to iOS devices.

The notarization process means that Apple continues to play a central role in the security review and approval of apps, regardless of the distribution channel.

New Business Terms in the Apple App Store: Reduced Commissions and Introduction of Fees

In parallel with opening up to alternative app stores, Apple has also announced new business terms for the App Store that include reduced commissions, a payment processing fee, and a core technology fee.

  • Commissions will be lowered to 10% for most developers and to 17% for digital goods and services transactions, regardless of the chosen payment processing system.
  • Additionally, a 3% fee for using payment processing through the App Store will be charged, with developers having the option to use their own payment service providers without any additional fee from Apple.
  • The “core technology fee” of €0.50 only applies after a million first installations within a year. Each additional first installation costs the developer 50c (updates do not count). This fee thus affects only a small number of developers but leads to additional costs for those who have to pay it.

Divided Echo: The Debate Over Apple’s Latest App Store Conditions

The introduction of these measures has elicited mixed reactions. While the ability to operate alternative app stores and the reduction of commissions are partly seen as positive steps towards greater openness and fairness, the strict conditions and new fees have also sparked criticism.

Several companies, such as Spotify, have criticized Apple’s approach as insufficient, especially regarding the introduction of a fee for free downloads, which is seen as a direct burden on business models based on the free distribution of apps.

In any case, Apple’s adjustments to the DMA policy mark a turning point in the design of the digital market in the EU. The admission of alternative app stores under strict conditions and the revision of business terms in the App Store reflect a compromise between complying with regulatory requirements and the desire by Apple to protect its market position and economic interests.

These developments could change the landscape for developers, businesses, and consumers alike, with the long-term impacts of these measures on innovation, competition, and user experience still to be seen.

Cortado Mobile Solutions is closely monitoring the developments around Apple’s latest announcements to adjust to the DMA policy. As a leading provider of Mobile Device Management, our top priority is to protect our customers from potential security risks associated with the use of alternative app marketplaces.