Apple’s move to allow EU customers to download apps without using the app store paves the way for the Australian government to pursue its own legislation.
Apple on Friday announced plans to overhaul the way apps work on iPhones and other iOS devices to allow for more competition, as part of a series of changes designed to comply with the EU’s Digital Services Act.
The company will also allow iPhone users to choose a browser other than the default and use alternative payment systems to Apple Pay.
Apple did not answer questions about why other regions, including Australia, were excluded from the change, but said on Friday these were not changes it would make if EU law did not require it.
Relating to: Apple will let EU customers download apps without using the App Store
Apple and Google have faced pressure from developers and regulators around the world in recent years over restrictions and fees of up to 30% per transaction on their respective app stores.
In November 2022, the Australian Competition and Consumer Commission (ACCC) published recommendations as part of its long-running digital platform investigation. It recommended the government create a code of conduct to address anti-competitive behavior on platforms such as self-preferencing, unfair business dealings, and barriers to interoperability and consumers’ ability to switch services.
In December last year, the Albanian government said it supported the recommendations in principle, saying that some platforms consolidated market power in certain services and that the regulator provided a strong case for the law.
But the government said the framework would be a “significant initiative” and tasked the treasury with developing a potential legal framework that would require “extensive consultation”.
Deputy Secretary to the Treasury and Minister for Financial Services Stephen Jones said the government was in the process of completing a consultation paper “for a potential competition regime” and would have more to say shortly.
This means for us to be the same or worse than the old rules
In December the government said it was “following international developments closely” and would ensure the framework developed was consistent and compatible with overseas approaches.
Despite calls for a change to Apple’s model, the move has been frowned upon by some of its harshest critics because developers who take advantage of the option will be charged a flat fee per app install outside the app store.
Epic Games CEO Tim Sweeney called the announcement “hot garbage” in a post on X last week. Epic is filing suit against Apple and Google in Australia regarding their app stores.
Spotify, which does not allow customers to subscribe via its iPhone app, said Apple’s announcement showed that the company did not believe the rules applied to them, and that issues such as annual fees per app download amounted to “extortion” to developers.
Relating to: Apple and Google block deductions from in-app purchases in Australia
“Like many other developers, Spotify now faces an untenable situation. Under the new terms, if we remain on the App Store and want to offer our own in-app payment, we will pay a 17% commission and a 0.50 cent Euro Core Technology Fee per installation and per year,” the company said last week.
“That means for us to be the same or worse than the old rules.”
Mozilla, the developer of the Firefox browser, told The Verge that the changes make it “as painful as possible” for developers to introduce an alternative to the Safari web browser.
A spokesperson for Apple said it supports the developers’ success.
“We are happy to support the success of all developers, including Spotify, which has the world’s most successful music streaming app. “The changes we’re sharing for apps in the European Union give developers choice, with new options for distributing iOS apps and processing payments.”
“Any developer can choose to stay on the same terms today. And under the new terms, over 99% of developers will pay Apple the same or less.”
The company stated that it did not make any payments to Apple because Spotify does not currently allow users to subscribe through its iPhone app. Apple said the company could not continue to make any payments under the new EU system, but Spotify’s comments suggested the music streaming company wanted to offer new services without paying Apple for the value provided.
Epic Games’ lawsuit against Apple and Google in Australia alleges an abuse of market power when app stores banned Fortnite because it offered its own payment options. The case will be heard in federal court for three months, starting in March. Epic won an antitrust case against Google in the US late last year but lost against Apple.