Why Third-Party App Stores Are Good for Apple Customers and the Company

With the passage of European Union Digital Market Act (DMA) 2022, Online platforms, including Apple, with more than €75 billion in EU revenue and more than 45 million monthly active end-users who need to expose their devices to third parties app shop.

DMA aims to end unfair practices by large online platforms with high market power, acting as so-called digital “gatekeepers” and providing the primary gateway between consumers and business users. is. The purpose of DMA is to make it easier for small and medium-sized tech companies to enter a market currently dominated by big tech companies.

Under certain provisions of law, apple You must allow third-party app stores such as set appMacPaw’s subscription-based service for iOS and MacOS applications, vaporValve’s popular distribution platform for video games, and AltStore, 3rd party app installers, on that platform. In addition, Apple must also allow sideloading, or allowing users to install software downloaded from the Internet.

I’ve noticed that many popular gaming apps are disconnected from their platforms.

Apple has expressed privacy and security concerns about allowing sideloading in other app stores and its platforms, and while it has not publicly stated that it will comply with the law, the company does allow software to comply. is reportedly being developed. european union Requirements to come into force in 2024, According to Bloomberg.

“This is all about increasing competition in the digital space,” he said. Denton‘Competition and Antitrust Department. “There is a perception that the digital giants are getting too big and there isn’t enough competition in this space.”

The DMA is the largest EU legislative effort to crack down on industry monopolies by Silicon Valley companies. high tech Giant. While the EU has typically dealt with each antitrust issue separately, the DMA is introducing comprehensive reforms aimed at addressing issues spread across the sector. But the key question is what effect these new regulations will really have on his Apple, its users and his EU app market going forward.

Benefits for Apple, Users, and Developers

Because Apple’s App Store comes pre-installed on all iOS devices and is the only app store available for iPhone and iPad devices, Apple can set rules for distributing apps to device users. I was. Additionally, Apple makes huge profits from the App Store and takes a commission of up to 30% (15% if annual net sales are less than $1 million) on all App Store transactions and regular subscriptions. (subscription fee will drop to 15% thereafter). first year).

Apple may be a little more resistant to DMA requirements, but Mykola Savin, product lead at Setapp, said it will allow customers to have more choice, new innovations, and an overall better experience. “We’ve seen cases like this, for example, with the new regulation for banks with the Payment Services Directive 2,” he said. .

Payment Services Directive 2 (PSD2) will take full effect on September 14, 2019, in a secure and standardized format for banks to more easily share with third-party providers (including fintechs that offer new financial services). Forced to publish data. at first, the bank resisted adopted the idea due to security concerns, but later found that open banking would allow them to offer a wider range of services to their customers and facilitate partnerships with startups that offer new solutions. .

“They used to handle a lot of sensitive data around bank accounts and transactions, but now that they are properly regulated and open, we are seeing a lot of products that are very useful for budgeting, wealth management and peer-to-peer payments. It’s a whole new industry and this leads to a better experience,” explains Savin.

Similarly, Savin noted that competition often helps drive business innovation. He cites a famous antitrust lawsuit against Microsoft in the 90’s. In this lawsuit, Microsoft was forced to allow other browsers in Windows, not just his own Internet Explorer.

“If it was done right, and done right, courtesy of Microsoft, it was a clear choice for users as to which browser to use as their default. It was helpful, it was not about the product, it was about helping users choose the best service.Now Microsoft is pivoting to Edge and integrating OpenAI.Competition and Innovation “We were forced to do that,” says Savin.

Where you get the app is up to you.

Directed by Ioannis Kokkoris Commercial Law Research Center A PhD from Queen Mary University in London pointed to another benefit for Apple.

“There are advantages for Apple to have multiple app stores on its platform,” he said. “There may be certain applications that are not available on the Apple App Store because the developer created them exclusively for the Google Play Store. [Android] Phones are more likely to buy iPhones because they have access to these other apps. “

For example, we found that many popular apps, especially in the lucrative gaming sector, were cut off from the platform by Apple’s strict App Store rules. One of his most popular games, Fortnite, was banned from Apple’s App Store in 2020. This is because its parent company, Epic Games, violated Apple’s terms of service by trying to trick users into buying cryptocurrencies on his website.

Interestingly, statistics show that iOS and Android users are split almost 50/50 in the US, while in the EU iOS users currently account for only 34% of total market share vs 64% Android users.

Additionally, DMA creates many opportunities for small independent developers to experiment and discover what works for their users, create better products, and try out new business models and distribution channels. Yes, says Savin. For example, Setapp works on a subscription basis. This means app developers can potentially reach an audience that may not be searching for their app directly, but are looking to use it as part of their productivity suite.

According to Kokkoris, allowing more competition in the market will benefit users because they will have more choice in the app stores they want to use. “And more choice is always good for consumers because more competition means lower prices, more innovation and better quality,” he said.

Concerns about security and privacy are legitimate

Marek acknowledged that Apple’s security and user privacy concerns are legitimate, adding that DMA is aware of those concerns.

“The DMA clearly states that Gatekeeper can take necessary and appropriate steps to ensure that sideloading and third-party app stores do not jeopardize its integrity and security.” says Marek. “But of course the question is how exactly do we address these concerns when implementing the requirements? [of the DMA]”

Testing is required before implementing a real security solution.

The DMA does not include criteria for determining whether third-party app stores are safe, but the European Commission will base its decisions on Apple’s views and the recommendations of technical experts, Kokkoris said. .

“Apple knows how to deal with these security issues,” he said. “And I think Apple could put in place some good rules and guidelines for third-party stores to follow. We also need general user awareness of security.”

Savin agreed that it is important for users to be aware of the security risks and make informed decisions about which applications to trust.

“Let users make the choice. We are adults and we make our own choices every day. On the web, we choose which bank to trust and where to buy groceries. The same should apply to where you get your data and apps.”

Marek added that the European Commission must ensure the security and integrity of Apple’s ecosystem or users are likely to lose trust in it. Not just Apple, but developers and users alike,” he said. “There will be a regulatory dialogue between the Commission and Apple on how exactly to interpret this provision and what exactly should be done to enforce it and what safeguards should be put in place. , must be very careful in enforcing the provisions.”

Therefore, testing is necessary before implementing a real security solution. Testing on the app side, he says, Marek. He added that after implementation, the committee should probably re-evaluate the solution to ensure the safety and integrity of third-party app stores.

“And I think the committee should be careful in implementing the solution in the sense that they have to take it one step at a time. They should make mistakes on the safety side and then re-evaluate. is [the solution] Regularly. If this only reduces the quality of users, I think it’s a real shame. “

DMA could further reduce Big Tech’s dominance within the EU and increase competition. But as mentioned earlier, this may not be so bad for everyone involved. The direct impact of his DMA on the business models of these large platforms is not yet known, but it is possible other companies will adopt similar legislation. Indeed, there are already examples of legislation aimed at curbing anti-competitive practices. Germany and KoreaWhatever happens, DMA is sure to make the EU app market interesting for developers, users and tech giants alike.