Apple to allow third-party app stores in response to new EU laws

Apple will soon allow alternative app stores on its devices. The move is part of Apple's sweeping overhaul aimed at complying with strict European Union requirements that will be implemented in 2024. The company is reportedly aiming for the changes to be ready as part of an update to next year’s iOS 17, which would be in line with the compliance requirements.

Apple's software engineering and services employees are reportedly engaged in a major push to open up "key elements of Apple's platforms", Bloomberg reported, citing people familiar with the matter.

What is Apple's play store-related overhaul all about?

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Apple's customers will now be able to download third-party softwares to their iPhones and iPads without using the company's app store. This will mean a move away from Apple's restrictions related to downloading the apps only from its app store and the up to 30 per cent commission it imposes on payments.

Why is Apple allowing alternative app stores?

The move is in response to the European Union laws that aim to give a level-playing field for third-party developers. Regulators and software maker firms have complained in the past that Apple and Google, two of the world's biggest smartphone app store providers, overwhelmingly dominate their position as gatekeepers.

Where in the world users will be able to use alternative app stores?

Currently, the development is limited for the Apple users in Europe. However, if similar laws to give level-playing fields to all software maker firms are passed elsewhere in the world, it could be marked as a significant precedent.

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Since in Europe, Apple will no more be able to claim up to 30 per cent commission from in-app payments, the shares of online dating app Bumble went up by 8.6 per cent, audio streaming service Spotify's shares climbed up to 9.7 per cent -- meaning that investors heaved a breath of sigh due to impending break from Apple's hefty commissions.

Apple generated about $95 billion in revenue from Europe during fiscal 2022. That revenue base is expected to take a hit when it makes the changes.

ALSO READ | Digital Markets Act: European Parliament ratifies landmark tech laws

The main new European law, the Digital Markets Act, will come into effect in the coming months. However, companies aren’t required to comply with all of the rules until 2024.

The laws apply to technology companies with market valuations of at least €75 billion ($80 billion) and a minimum of 45 million monthly users within the EU.

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