Europe's Digital Markets Act (DMA) will become the law of the land in March, but iPhone users hoping to see mobile apps open up could be disappointed. While the DMA will force Apple to allow app installation from other stores, known as sideloading, the company will reportedly charge developers a fee for the privilege. You're probably thinking that rather defeats the purpose of distributing apps outside the App Store, and we bet Apple is thinking the same thing.
Apple didn't even allow software installation on the original iPhone, but it discovered a massive cash cow when it rolled out the App Store with the iPhone 3G. The company's operating margin on the App Store is believed to be between 70 and 80%, so it's understandable why it would fight to keep the status quo. A US law seeking to open up app stores failed, but the EU Apple lost the fight in Europe. Come March 6, it will be forced to allow app installation from third-party sources in the coming weeks as a so-called "gatekeeper."
Apple has long maintained that the App Store's restrictions help make the iPhone more secure—it's not Apple's fault it also makes a boatload of money from it! Unsurprisingly, Apple's plan to allow sideloading would also fill the company's coffers. According to the Wall Street Journal, Apple plans to charge developers a fee for distributing iPhone apps outside the App Store. This would essentially replace the cut of revenue that Apple takes from each sale on its platform.
The report suggests this fee will be framed as payment for Apple's continued review of each iPhone app, even those downloaded from other sources. It's unclear how Apple would enforce this policy, but app makers do have to agree to terms and conditions when downloading iOS dev tools. That allows Apple to saddle European developers with restrictions that leave them hardly any better off than they were under the old system.
Apple has yet to announce its plans for the new era of app distribution in Europe. If it moves forward with the alleged payment requirement, it could face renewed opposition from Meta, Spotify, and others. Both companies, heavyweights in the App Store, have enacted plans to distribute apps outside Apple's walled garden. Facebook is working on an initiative called Project Neon, allowing iPhone users to download apps directly from Facebook ads. Spotify plans to communicate with its customers directly to cut Apple out of some transactions.
Apple has yet to reveal its full solution for the DMA to the European Commission. Once it does, the antitrust regulators must ensure the changes make the market more competitive while being "fair, reasonable, and nondiscriminatory," as required by the DMA. It's unclear if the Commission would accept additional fees for sideloading, but Apple has an army of lawyers to try and push it through.
