Apple Gives App Developers The Opportunity To Distribute Directly To Consumers In Europe

JAKARTA - On Tuesday, March 12, Apple created a major concession in fighting to protect its App Store dominance on iPhones and other devices in Europe. Now they announce that developers will be free to distribute their apps directly to consumers.

Apple announced the change to comply with the European Union's Digital Markets Act (DMA), which took effect last week. This change could reduce the high profit margin and stable revenue stream that Apple has relied on from its App Store, where the company charges up to 30% to developers.

This change, which only applies in the European Union, comes amid ongoing criticism from competitors that Apple's compliance efforts are inadequate.

Starting this spring, software developers operating in Europe will be able to distribute applications to EU customers directly from their own websites, not through the App Store.

"While the App Store will not be freely extorted, it will most likely remain a large enough source of revenue for some time as there are still obstacles related to Apple's peace offer," said Susannah Streeter, head of finance and market at Hargreaves Lansdown.

Developers still have to meet the terms and conditions set by Apple and become an authorized developer. Apple has also introduced a "core technology cost" of 50 euro cents per user account every year, even if the developer chooses not to use the App Store or Apple payment system.

The DMA aims to control Apple, Amazon, ByteDance, Meta Platforms, Google, and Microsoft and create a balanced competition for smaller competitors and ultimately provide Europe with more options.

"To reflect DMA changes, users at the EU can install apps from alternative app stores on iOS 17.4 and after. Users will be able to download alternative store apps from app store developers' websites," Apple said on its website. iOS refers to software platforms running Apple's iPhone and iPad.

The opening of Apple's ecosystem in Europe, which has been maintained by the company as a "pagared garden" that is very profitable, comes at a time sensitive to this tech giant.

The iPhone maker is struggling with declining revenue and weak demand for its smartphone in China. In January 2024, Microsoft toppled Apple as the world's most valuable company, where investors now see Apple losing the artificial intelligence technology race.

Apple shares rose 0.6% on Tuesday afternoon, reducing their losses in 2024 to 10%.

The changes announced on Tuesday included letting developers set up alternative app stores to offer catalogs comprising only developers' own apps with immediate effect.

Developers can choose how to design promotions within apps, discounts, and other offers when directing users to complete transactions on their websites rather than using Apple templates.

PRESSUREd by regulators and DMAs, last week Apple withdrew in its feud with Epic Games, allowing Epic Games to place their own gaming stores on iPhones and iPads in Europe. DMA violations can result in fines of up to 10% of the company's global turnover.

Apple also said it would appeal the EU cartel fine of 1.84 billion euros (IDR 31.5 trillion) given to them last week for blocking competition from Spotify and other music streaming competitors through restrictions on the App Store.