According to a report that was publish on Tuesday by Bloomberg News, which cited sources familiar with the matter, Apple Inc. is making preparations to permit alternative app stores on its iPhones and iPads in the European Union as soon as late next year to comply with a new European competition law that it had fought against. Apple to Allow Competing App Stores in EU
If Apple were to open its doors to competing app stores, it could pose a significant challenge to its rapidly expanding services business. However, to do so, Apple’s competitors would first have to overcome the challenge of persuading customers to abandon the convenience and safety offered by Apple’s app store.
The severity of the repercussions will be proportional to the degree to which the American corporation complies with the additional regulations contained in the European statute known as the Digital Markets Act (DMA).
A modification that Apple plans to implement on rival shops may result in more revenue for businesses such as Microsoft Corporation, Meta Platforms, Inc., Amazon.com, Inc., and other organizations operating app stores.
Apple declined to respond. Although Meta, Amazon, and Microsoft did not answer demands for comment, a consortium of app developers stated that Apple must completely comply with the DMA to open the market to competition truly.
Customers of Apple could eventually install programs without going via the company’s App Store if a move that has been rumore to be planne goes into effect. However, Apple has yet to decide whether or not it would comply with other sections of the law, such as allowing for additional payment methods to its own. This is one of the provisions.
If Apple were to allow its payment mechanism to be circumvente, it would put at risk the billions of dollars in revenue it generates from charging a fee of up to 30 percent on purchases made in the App Store.
Sensor Tower, a mobile analytics company, says that about $10 billion worth of transactions went through the App Store last year, and at least 70% of the money goes to the developers of apps.
Angelo Zino, a stock analyst at CFRA, said that he thinks competing app stores in Europe will affect less than 0.2% of Apple’s total sales.
The European Union’s DMA should be enforce around the middle of 2024. The law says big tech companies must let competitors use their systems, which is meant to give customers more options. The law calls them “big gatekeepers.” If they break the law, they could be fined up to 10% of their annual global revenue.
The company that makes the iPhone has said that letting users sideload apps instead of getting them from the App Store puts their security and privacy at risk. But some regulators and critics, like Epic Games, the company that makes “Fortnite,” say these worries are overblown.
Tim Sweeney, CEO of Epic, tweeted on Tuesday that if the U.S. Congress doesn’t pass a bill similar to DMA, “American developers would be slaves.”
Alphabet Inc.’s Google has let phones with its Android operating system do sideload for a long time. Epic has said in court that 90% of downloads still come from Google’s official app store because users have to change settings and swipe past security warnings to take advantage.