When the European Union introduced the Digital Markets Act, it designated platforms as gatekeepers, with the intention of opening things up to prevent monopoly abuses. As a result, Apple has changed the iPhone ecosystem radically for EU users, and now, it’s just been confirmed, similar changes are coming for iPad users.
Apple iPad: soon to change radically in the EU.
My usual reminder: though it will only affect users in the EU, other governments will be watching closely to see if they want to implement similar legal changes in their countries.
May 5 update below. This post was first published on May 2, 2024.
In a news update for developers on Thursday, May 2, Apple has confirmed that the changes it (reluctantly) introduced for the iPhone, will come to the iPad this fall—the EU allowed six months to comply and the fall fits into that timeframe.
Apple said, “This week, the European Commission designated iPadOS a gatekeeper platform under the Digital Markets Act. Apple will bring our recent iOS changes for apps in the European Union (EU) to iPadOS later this fall, as required. Developers can choose to adopt the Alternative Business Terms for Apps in the EU that will include these additional capabilities and options on iPadOS, or stay on Apple’s existing terms.”
The changes referred to are comprehensive, allowing alternative app marketplaces to exist which let users download apps from them, rather than just the Apple App Store. It also permits users to pick a different browser for use on the device, and the browser doesn’t have to be based on WebKit, as browsers are on the iPhone in the U.S., U.K. and elsewhere.
Users can also choose their own favorite default search engine, something which has changed the landscape in the EU already, it seems.
Additionally, contactless payments can be made in more ways, not relying just on Apple Wallet and Apple Pay. As Apple says, “That includes APIs enabling developers to use NFC technology in their banking and wallet apps throughout the European Economic Area.”
In these alternate marketplaces, app developers must pay a Core Technology Fee for downloads over the first million installs, but Apple has now said that if the same app is installed on the iPhone and iPad, that only counts as one install, helping to keep that one million threshold at bay.
While many developers will remain App Store-only, this move to embrace the iPad could change the game.
May 5, 5.42 a.m. update. The confirmation that the iPad will fall under the same rules as the iPhone in Europe was only part of the story Apple was telling in the last few days. It also announced an additional change to the Core Technology Fee besides the one mentioned above.
As you’ll have picked up, the CTF is one of the most controversial items introduced by Apple, done to reflect the value that Apple has invested in the alternative business terms to keep users safe. After the first million installs, the developer pays $0.54 (0.5€) for each annual install, so the news that the same app downloaded on iPhone and iPad count as one towards that total is welcome.
But additionally, Apple has said that no CTF is required if the developer has no revenue, such as a free app with no ads. Apple said, “This includes creating a free app without monetization that is not related to revenue of any kind (physical, digital, advertising, or otherwise). This condition is intended to give students, hobbyists, and other non-commercial developers an opportunity to create a popular app without paying the CTF.”
And small developers, those with less than €10 million in global annual revenue, “receive a 3-year free on-ramp to the CTF to help them create innovative apps and rapidly grow their business.”
May 5, 2.30 p.m. update. There were more details about how small developers will be better protected from the Core Technology Fee. I get why Apple is charging it: keeping the iPhone safe for users seems to be Apple’s paramount concern, and that costs money. It has repeatedly said that using alternative app marketplaces is less secure than Apple’s own, so extra safeguards have to be put in place.
Apple has said that not only will there be a three-year on-ramp without cost but also a cap. It says, “Within this 3-year period, if a small developer that hasn’t previously exceeded one million first annual installs crosses the threshold for the first time, they won’t pay the CTF, even if they continue to exceed one million first annual installs during that time. If a small developer grows to earn global revenue between €10 million and €50 million within the 3-year on-ramp period, they’ll start to pay the CTF after one million first annual installs up to a cap of €1 million per year.”
If the global revenue is €10 million then the developer could pay up to 10% to Apple, or €1 million, though as this cap applies across the board up to revenue of €50 million, at the highest end the rate falls to as little as 2%
Of course, many developers will decide to continue as they are now, that is, just using the Apple App Store and paying the relevant commission. It’s straightforwardly explained but there are still complications in the new arrangements, which may also be a consideration for developers as they decide which route to take.
What’s for sure is that by the time 2024 is over, this year will have seen radical changes to the way the iPhone, and now the iPad, operate in the European Union. Will other countries adopt similar laws to force such changes on Apple? That seems likely and the real question is not if, but when.
Michael Johnson is a tech enthusiast with a passion for all things digital. His articles cover the latest technological innovations, from artificial intelligence to consumer gadgets, providing readers with a glimpse into the future of technology.
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