Bowing to pressure from EU regulators, Apple has announced sweeping changes coming to iOS, the App Store, and Safari for users in the European Union. These changes address long-standing complaints about Apple’s “walled garden” approach and will provide more choice and flexibility to iPhone owners in the region.
Most significantly, Apple will allow sideloading of apps from third-party app stores for the first time ever on iPhone. Currently, the iOS App Store is the only way for EU users to download apps. Enabling sideloading opens iOS up to alternative distribution channels.
Along with sideloading, Apple will also permit use of third-party payment systems in apps distributed through the App Store. This bypasses Apple’s commissions on in-app purchases, which can be as high as 30%. To incentivize developers to stick with Apple’s system, commissions will be reduced to 10% for small developers earning up to $1 million and 15% after that threshold.
Apple is also making changes to iPhone’s web browsing experience. Most notably, iPhone users will be able to set third-party web browsers like Chrome or Firefox as default, replacing Apple’s Safari. In the past, users could only choose different search engines within Safari.
Additional reforms address complaints that Apple has favored its own services over competitors’. For example, third-party “tap to pay” services like Square will be allowed to use iPhone’s NFC chip, and all-in-one game subscription services can be offered without each included game needing individual App Store approval.
While Apple claims these changes undermine iPhone security and privacy, regulators contend the walled garden stifles competition and consumer choice. The reforms are set to take effect in early 2024 across the EU’s 27 member countries.
Although Apple is opposing parts of the new EU Digital Markets Act, it has opted to comply rather than cede part of the lucrative European iPhone market. It’s unclear if these changes will expand beyond the EU at this time.
In a statement, Apple said “We believe deeply in competition and choice and will continue working every day to make the best products on earth for our customers…while making sure the App Store remains a safe and trusted place where users can download the apps they love.”
Clearly, Apple is walking a thin line between maintaining control over its ecosystem and adhering to regulatory demands. How much these historic changes will shift the dynamics between Apple, developers, and users remains to be seen. But the more open iOS will undoubtedly create new opportunities in the EU.
