Apple is reportedly preparing to impose new fees and restrictions on software downloads outside of its App Store — in what could be a “major test” of Europe’s attempts to enforce a sweeping law aimed at boosting tech competition.
It’s part of the Cupertino, Calif. tech giant’s effort to comply with the European Union’s Digital Markets Act ahead of a March 7 deadline — while also maintaining its hold on revenue generated by software downloads on its device.
Apple will allow iPhone users to download apps from other app stores for the first time ever as part of the plan – a practice known as “sideloading.”
Nevertheless, Apple will still maintain the power to review all apps downloaded from other app stores onto its devices, the Wall Street Journal reported, citing people familiar with the company’s thinking.
Apple also will charge fees from developers who offer downloads separate from the App Store. The size of those potential fees was not immediately known.
The plan would only apply to Europe, not the US market.
If it is enacted, Apple’s plan could face opposition from software developers who expected to offer downloads without such restrictions, the report noted.
It also remains to be seen if EU regulators will consider the plan to be compliant with its rules — or as an effort by Apple to skirt attempts to loosen its dominant hold on the app marketplace.
To that end, European Commission officials have reportedly met with Apple and other tech firms to go over their plans to comply.
That included a meeting earlier this month between Apple CEO Tim Cook and EU Commissioner executive vice president Margrethe Vestager, a top antitrust official, according to the Journal.
At the time, Vestager told reporters that Europe “stands absolutely ready to do noncompliance cases” if necessary.
The Journal’s sources said Apple spent “more than a year” crafting its plan to address the European law.
Apple has yet to formally announce any details of its plans and the Journal said they could still change.
The Post has reached out to Apple for comment. Apple shares were flat in trading Wednesday.
Apple has long argued that it needs to maintain strict supervision over app downloads to ensure user privacy and device security.
Meanwhile, Apple’s detractors have routinely blasted the steep fees it charges — including a 30% cut of App Store sales — and alleged boosting of its own apps.
The report noted that several competitors, including Spotify, Meta and Microsoft, are crafting potential strategies to capitalize on the law through their own app download offerings.
The Digital Markets Act is aimed at six companies that have been deemed “gatekeepers” of the broader internet: Google parent Alphabet, Amazon, Apple, TikTok parent ByteDance, Facebook and Instagram parent Meta and Microsoft.
The law, which took effect in November 2022, is aimed at creating a level playing field for smaller tech competitors and improving data privacy protections for users.
The six companies will face penalties if they don’t comply with its rules.
Google has also faced regulatory scrutiny over practices within its own “Google Play” Android app store. However, in a key difference, Android phone users are already allowed to download apps from places other than the Play store.
Earlier this week, Meta said in a blog post that it would provide more choices to Facebook and Instagram users in Europe in order to comply with the DMA — including “whether they would like to share information between our services.”
For Apple, the changes in Europe are part of a broader effort by the company to stave off mounting regulatory and legal scrutiny over its business practices
Earlier this month, Apple updated its App Store policies in the US to allow developers to use third-party payment services — so long as they pay Apple a 27% cut.
The company has enacted a similar fee structure for outside payment methods in the Netherland and South Korea.
Apple’s move came after the Supreme Court declined to take up appeals filed as part of the company’s lengthy battle with “Fortnite” maker Epic Games.
Epic Games CEO Tim Sweeney — a vocal critic of Apple — blasted Apple’s policy changes as “outrageous.”
Meanwhile, the Justice Department is said to be preparing a sweeping antitrust lawsuit against Apple. Action could be taken by as soon as February, according to one report.
Source
