Apple retreats in its fight to protect App Store in Europe

This move, however, may impact Apple’s high profit margins and steady revenue stream, as the company charges developers fees of up to 30% on its App Store

Apple has made a significant concession in its fight to protect the dominance of its App Store on iPhones and other devices in Europe on Tuesday. In compliance with the European Union’s Digital Markets Act (DMA), Apple has announced changes that will allow developers to directly distribute their apps to consumers.

This move, however, may impact Apple’s high profit margins and steady revenue stream, as the company charges developers fees of up to 30% on its App Store.

These changes, specific to the EU, come amidst ongoing criticism from competitors who argue that Apple’s compliance efforts are inadequate.

Starting this spring, software developers operating in Europe will have the option to distribute their apps directly to EU customers through their own websites, bypassing the App Store.

While the App Store won’t be able to be milked as freely, it is still likely to remain a considerable cash cow for some time as there are strings attached to this peace offering from Apple, according to Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Nevertheless, developers must still adhere to Apple’s terms and conditions and be authorized by the company.

Additionally, Apple has introduced a “core technology fee” of 50 euro cents per user account annually, regardless of whether developers choose to use Apple’s App Store or payment system.

The DMA aims to regulate tech giants such as Apple, Amazon, TikTok’s owner ByteDance, Meta Platforms, Google, and Microsoft, fostering a fairer playing field for smaller competitors and promoting increased competition for European consumers.

To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later. Users will be able to download an alternative marketplace app from the marketplace developer’s website, Apple stated on its website. IOS refers to the software platform that runs Apple’s iPhones and iPads.

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