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Apple opens iPhone ecosystem in EU: What it means for consumers, developers

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Apple has announced that it will bring changes to iOS, Safari browser, and the App Store in the European Union (EU) to comply with the Digital Markets Act (DMA). With the new changes, iPhone users in the EU will get access to third-party App marketplaces, ability to change default browser, and set preferred payment method other than Apple’s for in-app purchases. Apple said the new changes will be limited to the 27 EU member countries and will roll out with the iOS 17.4 update in March. Here is a roundup of the changes coming to Apple iPhone platform:

Alternative marketplace for apps distribution on iOS

With the iOS 17.4 update, users in the EU will get the option to install apps from a third-party app stores that Apple is calling “alternative app marketplaces”. Users will be able to download alternative app stores from the respective developer’s website. Apple said, the alternate app marketplaces can install and support software on iOS devices, access data across a catalogue of apps, manage user’s purchases and subscriptions, and more. However, developers managing these app marketplaces would need to meet Apple’s “Notarization” requirements, like other iOS apps.

Apple said notarization is its review system for apps that ensure that the iOS apps are free of known malware, viruses, or other security threats. It includes a combination of automated checks and human review. Notarized apps will undergo checks during installation to check for user’s authorisation. If the app fails to comply with the Notarization regulations, the app will be prevented from launching and new installations will be halted.

With the update, users will be able to manage the list of allowed app stores and installed apps from settings. Removing a third party app store will prevent app installations and updates from the developer’s website. Users can also set a third-party app store as their default app installation source.

Choice to pick default web browser

To comply with DMA changes, Apple will provide users in the EU to select a default web browser apart from Safari. Apple said users will be prompted to pick the default browser on a new choice page on Safari once they have installed the iOS 17.4 update.

Despite opening up to allow third party browsers to become the primary option, Apple will only authorise developers to implement alternative browser engines after meeting specific criteria and committing to privacy and security requirements, such as timely security updates.

Contactless payment transactions in banking apps

Apple will allow third-party banking and wallet apps to access contactless payment transaction methods on iOS. Users in the EU will be able to initiate payment transactions from other authorised banking or wallet apps at compatible Near-Field Communication (NFC) terminals, including other smartphones.

Users can also choose and manage their preferred default contactless payment app through a new setting for contactless payments. Contactless payments on third-party apps will launch by double clicking the side button on the iPhone.

Alternative payments on the App Store

Complying to DMA changes, Apple said its App Store will support alternative payment service providers and link-out to purchase for developers. Developers of iOS apps will be able to select two additional payment processing options for charging the users in the EU. Developers can choose Payment Service Providers (PSPs), which will let users complete transactions within their app. Or, developers can redirect users to an external webpage to complete a transaction for digital goods and services. Developers cannot offer both the options together to the user. Alternatively, they continue using the App Store’s In-App Purchase as well.

For identification purposes, apps that contain an alternative payment option, will be displayed with an informational banner on the app’s product page on the App store.

Developers who will choose to use PSPs and link-out to purchase will be responsible for paying a commission to Apple for using the App store platform. If the developer chooses to stick with the current Apple’s payment processing system, a 3 per cent processing fee will be charged by the company.

First Published: Jan 29 2024 | 5:17 PM IST

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