In Europe, Apple Retreats In Its Fight To Defend The App Store

(CTN News) – On Tuesday, Apple announced it would allow developers to distribute their apps directly to consumers in Europe in hopes of protecting its dominance of the App Store.

The changes were made to comply with the EU’s Digital Markets Act (DMA), which went into effect last week. As a result of the changes, Apple might be able to lose its high profit margins and steady revenue stream from its App store, where developers can pay fees up to 30%.

Despite continued criticism from rivals that is not doing enough to comply with compliance laws, the changes affect only the European Union.

The App Store will no longer be the only means of distributing apps to EU customers, as software developers operating in Europe can now distribute their apps directly through their own websites.

The App Store remains a significant cash cow for some time, even if won’t be able to milk it as freely,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.

In addition to meeting Apple’s terms and conditions, developers must be authorized developers. The company also charges developers 50 cents per user account per year for “core technology,” regardless of whether they use the App Store or payment system.

DMA wants to rein in Apple, Amazon, TikTok owner ByteDance, Meta Platforms, Google and Microsoft, and create an equal playing field for smaller rivals.

Apple says EU users can now install apps from alternative app marketplaces starting with iOS 17.4. Download it here. In Lille, France, September 13, 2023, store is pictured with its logo. Apple’s iPhones and iPads run iOS. License photos from REUTERS/Stephanie Lecocq here

A sensitive moment for comes with the opening in Europe of its ecosystem, which it has long guarded as a highly profitable “walled garden.”

Apple is struggling with shrinking revenues and weak demand for its smartphones in China. With investors believing is lagging its Big Tech rivals in the race to dominate artificial-intelligence technology,

Microsoft dethroned Apple as the world’s most valuable company in January.

In 2024, Apple will lose 10% of its stock value, down from 10% in 2023. Its stock was up 0.6% on Tuesday afternoon.

With immediate effect, developers can set up alternative app marketplaces that only offer their own apps as part of the changes announced on Tuesday.

Apple’s template does not allow developers to modify promotions, discounts, or other deals in-app when they redirect users to complete a transaction on their website.

The DMA and regulators last week pressed Apple to take a step back in its feud with Epic Games, allowing it to put its own game store on iPhones and iPads. Fines for DMA violations can reach 10% of a company’s global revenue.

A fine of 1.84 billion euros ($2.01 billion) handed to last week for restricting competition from Spotify and other music streaming rivals through its App Store has also been appealed by Apple.

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