Today, Apple announced how it intends to comply with the Digital Markets Act (DMA), which the European Commission says applies to the App Store. There are a lot of details to cover, but in summary, radical change is coming to the EU App Store, but only in the EU.

Let’s take a look at how we got here and what Apple’s plans are.

The DMA is a law enacted in the European Union that’s intended to ensure that the economically significant platforms of large tech companies are operated fairly and openly. In the case of Apple, the EU has designated Apple as a platform ‘gatekeeper’ and the App Store as a Core Platform Service that must comply with the DMA. The EU is also investigating whether iMessage should be deemed a Core Platform Service, but it hasn’t reached a decision yet.

Source: European Commission.

Apple appealed the EU’s DMA designation, but that doesn’t excuse the company from complying with the law by its March 6, 2024 deadline, just under six weeks from now, which is why the company is announcing changes to the EU App Store today. We’ll follow up as more details emerge, but here are the highlights of what Apple has announced:

Alternative Marketplaces: Offering Apps Outside the App Store

One of the biggest changes coming with iOS and iPadOS 17.4 is the concept of alternative marketplaces, which are app stores that are third-party storefronts that will be unaffiliated with Apple. Alternative marketplaces will be accessed through their own apps.

• The new program will apply to EU users only, and it will become available with iOS 17.4
• iOS 17.4 is launching in developer beta today, and rolling out publicly in March
• Apple is introducing a new kind of iOS app that can install other apps, which will be available to any developer to build with new APIs if the developer meets Apple’s criteria
• When developers submit their apps, they will be able to select the App Store or alternative marketplace distribution in App Store connect
• Like the Mac, all iOS and iPadOS apps will be notarized, regardless of where they are distributed
• The notarization process will check for malware and there will be a base level of human review, but apps will not be restricted based the content they deliver
• Users will see a new sheet design for app installation from other sources. The sheet contains screenshots and other basic details about the app
• Users can always manage third-party marketplaces from the Settings app

New Default Browsers, Game Streaming, and Other New App Types

• There will be a new default browser picker in Safari. The first time users in the EU open Safari after upgrading to iOS 17.4, they will be presented with a screen to choose an alternative browser
• Developers will not need to build browsers using WebKit going forward, but their browsers will run in a new browser sandbox
  • At this point, it is not clear if third-party browsers built with a third-party engine will be able to install additional browser extensions
• Game streaming, which has been restricted to Safari, will be offered in the App Store for the first time (as well as outside the App Store in the EU)
• Developers will be able to offer contactless payment apps in the App Store
• NFC Access will allow developers to offer payments without using Apple Pay and Wallet, with a technology similar to how third-party wallets work on Android

Business Terms

• Apple is expanding analytics for developers, including over 50 new reports available, which will be available to developers worldwide to track engagement, commerce metrics, app usage, and more
• Users’ App Store history data can be shared by them with third-party marketplaces
• Developers can offer third-party payment processing or link out for purchasing options
• Apple will charge developers a core technology fee of 0.50 EUR for first annual app install to use Apple’s technology, counted only once per account and once per year
• However, there will be no fee for the first 1 million annual installs, NGOs and non-profits, which Apple believes will mean the fee will only apply to 1% of EU developers
• Apple is also providing a fee calculator for developers
• The standard App Store commission for apps sold in the App Store will drop to 17%
• The commission discounted rate available on some subscriptions will drop from 15% to 10%
• Apple won’t charge any commission on apps sold outside the App Store
• There will also be an optional 3% fee for App Store payment processing, but no fee if a developer uses an alternative payment processor

Developers can learn more on Apple’s Developer site.

This will surely not be the last we hear about Apple’s compliance with the DMA. It remains to be seen whether the company’s plans will satisfy EU regulators. I expect Spotify and others will continue to push for greater freedom to offer apps and services outside of the App Store, too.

Apple’s new system will be available as part of iOS and iPadOS 17.4, which will be available in beta to developers today. The public launch of 17.4 is expected in March.

We’ll be updating this story as more details as they emerge, so be sure to come back later for more.