Apple Inc. is planning to add new fees and restrictions as it moves to comply with a new European law and open its ecosystem to allow third-party software downloads outside its App Store, the Wall Street Journal reported Wednesday, citing people described as familiar with the matter.
The plans would only apply in Europe and will allow consumers to download software onto the iPhone for the first time without going through the App Store. The move comes as Apple
AAPL
is facing regulatory and legal challenges from software makers around the world who are fighting its control of third-party software.
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Facebook parent Meta Platforms Inc.
META,
Spotify Inc.
SPOT
and other platforms are preparing new download options ahead of the new rules, with Meta considering allowing customers to download apps directly from ads. Spotify is planning to let users download some of its iPhone apps directly from its website, the company reportedly told the paper. Microsoft Corp.
MSFT,
meanwhile, has in the past considered a launch of its own third-party app store for games.
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Apple has argued that its App Store keeps the iPhone secure from viruses, but critics say its behavior is anticompetitive.
Apple’s approach to the EU law, according to the Journal report, will ensure that it keeps close oversight of apps downloaded outside the App Store, a process known as sideloading.
The company will be able to review each app downloaded outside of its App Store. Apple also plans to collect fees from developers that offer downloads outside of the App Store, said people familiar with the company’s plans. The company hasn’t yet announced its plans, and they could change.
Apple has been said to be working on a response to the law change for more than a year and has a March deadline to complete its plan.
The EU passed the Digital Markets Act in 2022 with the aim of ending anticompetitive practices by Big Tech, and to address Apple’s strict control of software downloads and the App Store.
The EU law comes against the backdrop of the U.S. Supreme Court’s decision on Jan. 16 not to hear appeals of an antitrust ruling on Epic Games Inc.’s lawsuit over App Store policies, along with a torrent of other legal scrums involving Apple.
Apple won on nine of 10 counts in a federal court case in 2021, but Judge Yvonne Gonzalez Rogers ruled Apple violated California’s unfair-competition law in limiting developers’ ability to communicate with users outside the app or to use alternative payment systems. Last year, the Ninth U.S. Circuit Court of Appeals upheld her overall decision, prompting both Apple and Epic to appeal to the Supreme Court.
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The legal machinations prompted Apple to issue new policies that require developers to pay it a 27% commission if they use an alternative payment method — much as the company did in South Korea and the Netherlands following similar legal rulings in those countries.
Apple’s stock has gained 38% in the last 12 months, while the S&P 500
has risen 21%.
