Apple announces huge changes for iOS apps in the EU

My hot-take as a Mobile Engineering Strategy expert

Huge news from Apple last night on changes affecting iOS apps in the EU. There seems to be a lot more substance to this than the recent changes to external payments in the US.

Here’s what’s changing:

• Apps can be distributed on alternative apps stores (this is massive).
• Developers can use alternative payment providers for apps distributed on the Apple App Store (also massive).
• Browser apps can use engines that aren’t WebKit (more on this below, but this is at least as massive as the first two points).
• There are new frameworks to allow apps to implement their own contactless payment via NFC (this is also pretty massive).
• There are various frameworks, APIs and tools to support all of the above, including 3rd party app store development.

There is also an option to switch to new business terms, with a new payment structure (or stay on existing ones), which are made up of 3 components:

• Commission of 17% / 10% (depending on distribution volume) on all transactions for digital goods or services (e.g. app purchases, in-app purchases, subscriptions). This applies if you opt for a different payment processing system, but importantly NOT to apps sold on alternative marketplaces. (As an aside this is much more favourable than the 27% commission on external payments in the US store).
• An optional payment processing fee of 3% if you choose to use Apple’s existing payment processing system.
• Something called a ‘Core Technology Fee’ (CTF) of €0.50 charged for every ‘first annual install’ (i.e. the first time a user installs a given app in that year), over a threshold of 1 million. So smaller apps won’t pay this charge.

These changes are being made in response to the Digital Markets Act (DMA), which is legislation that applies in the EU. i.e. it’s unlikely there will be similar changes in other regions without legislation.

Do you need to do anything as an app developer?

• In the short term, no. You don’t have to do anything to continue to distribute your apps via the App Store in exactly the same way, and under the same payment terms.
• In the near term, you’ll need to decide if you want to switch to the new business terms / commission structure.
• Longer term you might choose to distribute your app in an alternative or additional marketplaces. This will require some level of initial setup.

What could this mean longer term for mobile?

• It will be possible to distribute apps to iOS devices without following having to adhere to the Apple Guidelines.
• Allowing alternative app stores could unlock super-app eco systems, similar to those that are popular in the Chinese market.
• Alternative app stores combined with allowing non-WebKit browsers could finally make PWAs viable for a lot more use cases than they currently are.

Hi, I’m Gabrielle Earnshaw, and I’m a Mobile Engineering Strategy expert. I help organisations build their mobile apps in way that drives more business value.

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