Apple Announces Significant Changes to App Store and Payment Systems in Europe

In a landmark move set to reshape the digital landscape within the European Union, Apple has detailed a series of comprehensive modifications to its App Store and core elements of iOS, aiming to align with new EU legislation. Starting March, the tech giant will break new ground by permitting users in the EU to download applications and make purchases outside of its proprietary App Store. This announcement comes as part of the rollout of iOS 17.4 beta version, which is currently accessible to developers for testing.

For years, Apple has maintained a firm stance against such alterations, voicing concerns over potential risks to user security, including increased susceptibility to scams, malware, and other privacy and security threats. However, the impending enforcement of the EU’s Digital Markets Act on March 7 mandates significant operational changes for major tech corporations, including Apple.

Phil Schiller, a key figure at Apple, reiterated the company’s apprehensions in a statement, expressing that while the changes adhere to the EU’s Digital Markets Act, they could inadvertently expose users to increased privacy and security risks. “The changes we announce today are in compliance with the requirements of the EU Digital Markets Act, yet they aim to safeguard EU users from the inevitable privacy and security threats that the regulation may introduce,” he stated.

Developers stand at the forefront of this transformation, as they will, for the first time, have the opportunity to accept payments and distribute applications outside the App Store. Despite this newfound freedom, Apple will continue to enforce a review process for apps not released through its store, utilizing a combination of automated and manual scrutiny focused on platform integrity and user protection against malicious software. However, Apple acknowledged its limited capacity to mitigate other risks, such as apps that engage in fraudulent, abusive behaviors or expose users to illegal or harmful content.

In a significant shift, Apple has also revised its commission structure, notorious for its high fees. Developers will now be subject to a 17% fee for subscriptions and in-app purchases, with the rate for “most developers” dropping to 10% after the first year. Furthermore, a new “payment processing” fee of 3% will be applied to transactions conducted through its store. Additionally, a “core technology fee” of 0.5 euros will be levied on each app download, regardless of its origin, after the first million installations. Apple contends that this new fee framework will reduce the overall charges for most developers, with the core technology fee having the most significant impact on larger developers.

These updates are expected to usher in other significant changes for iPhone users in Europe. Apple will introduce new APIs allowing app manufacturers to access the iPhone’s NFC chip for contactless payments, facilitating transactions independent of Apple Pay. Adjustments to its Safari web browser are also on the horizon, with the iOS 17.4 update prompting European users to consider changing their default browser upon first launch. Moreover, browser developers will have the option to use engines other than Apple’s own WebKit, potentially leading to new versions of browsers like Chrome and Firefox that utilize their rendering technologies. Whether these changes will render these browsers faster or more efficient than Safari remains to be seen, but they represent a significant shift in one of the most crucial applications on mobile devices.

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