Following the EU’s Digital Markets Act, Apple has today unveiled substantial modifications to iOS, the App Store, and how browsers function on the platform. These adjustments will be accessible in the EU when the iOS 17.4 update rolls out in March.
To begin with browsing, although it is feasible to choose a default browser other than Safari today, any browser other than Safari is required to utilize Safari’s WebKit rendering engine. This will soon change, granting every browser the freedom to use any engine it desires. After installing iOS 17.4, EU iPhone users will be prompted with a browser choice screen the first time they access Safari.
The much more significant development is that Apple will permit alternative app stores on iOS. Despite stating that this will “create new risks” for its users, the company has decided to conduct a “baseline review” of all apps, regardless of their distribution channel. This will involve a combination of automated checks and human evaluation. A summary of the apps and their functionalities will be displayed prior to download due to this process.
To ensure that alternative app stores’ developers “comply with ongoing requirements that protect users and app developers,” Apple will sanction these “marketplace developers.” The company will also introduce additional safeguards to prevent iOS applications from launching if they contain malware.
Nevertheless, Apple acknowledges that it will have “less ability” to handle risks such as “apps that contain scams, fraud, and abuse, or that expose users to illicit, objectionable, or harmful content” under the new DMA-mandated guidelines. More details about these changes will be provided by the company in March when they come into effect.
Within the EU, NFC will be accessible on iPhones. This will allow alternative wallet and banking applications to utilize tap-to-pay and be designated as the default mode for mobile payments.
The App Store will have new opportunities for using payment service providers within an app’s development, as well as new options for processing payments “via link-out,” which will enable users to execute transactions for digital goods and services on the developer’s external website.
Users will be notified when an app they are installing uses alternative payment processing. They will also receive a notice when they are no longer transacting through Apple, and when a developer directs them to transact with an alternative payment processor. This will also entail a revised app review procedure, in which Apple will verify that developers accurately present this information.
Starting now, in the EU, iOS apps available on the App Store will pay a commission of either 10% (“for the huge majority of developers and subscriptions following their first year”) or 17% on transactions for digital goods and services. Apps that continue to use the App Store’s payment processing will also be subject to a 3% payment processing fee. For apps that exceed a 1 million threshold during the first annual installation, there will be a “Core Technology Fee” of €0.50.
Apple anticipates that 99% of developers will experience reduced or unvaried fees owed to the company, while fewer than 1% will have to pay the Core Technology Fee as detailed above for apps on iPadOS, macOS, watchOS, and tvOS in the EU. Developers that handle payments through a third-party or through their website will receive a 3% discount on the commission owed to Apple.
