Apple prepares to allow alternative app stores on iPhones and iPads

Apple is preparing to allow alternative app stores on its iPhones and iPads in the European Union as soon as late next year to comply with a new European competition law.

As part of the changes, customers could ultimately install apps to their iPhones and iPads without using the company’s App Store, according to the report. But Apple has not made decisions on whether to comply with other provisions of the law, such as allowing for alternative payment systems to its own.

Permitting its payment tool to be bypassed could cost Apple billions of dollars in revenue it collects from charging up to a 30 per cent commission on App Store purchases.

Apple did not immediately respond to a Reuters request for comment.

The iPhone maker in the past has said allowing sideloading, or bypassing, of its App Store, exposes users to security and privacy dangers. But some regulators and critics, such as “Fortnite” maker Epic Games, have said those concerns are overblown.

Rival Google has allowed sideloading on phones powered by its Android operating system for years, and it provides warnings to users over security issues.

Apple’s software engineering and services employees are engaged in a major push to open up key elements of Apple’s platforms, the report said.

The new European law, called the Digital Markets Act, requires technology companies to allow the installation of third-party apps.

But Apple has not made decisions on whether to comply with other provisions of the law, such as allowing for alternative payment systems to its own.

The changes are designed initially to just go into effect in Europe, but it could lay the groundwork to be rolled out in other countries, including the US.

The iPhone maker in the past has said allowing sideloading, or bypassing, of its App Store, exposes users to security and privacy dangers.

But some regulators and critics, such as ‘Fortnite’ maker Epic Games, have said those concerns are overblown.

Rival Google has allowed sideloading on phones powered by its Android operating system for years, and it provides warnings to users over security issues.

Apple’s software engineering and services employees are engaged in a major push to open up key elements of Apple’s platforms, the report said.

The report also revealed that some companies that offer dating apps have seen a jump in shares following the news of the change, according to Bloomberg.

Match Group Inc. jumped as much as 10 percent and Bumble Inc. was up as much as 8.6 percent — a sign investors think the companies could get a break from Apple’s commissions. Spotify Technology SA, the audio streaming service, climbed as much as 9.7 percent.

The App Store is the only way to distribute apps on iPad and iPhone devices. Both Apple and Google previously charged a 30 percent commission fee, but that changed following lawsuits in 2020 when Epic Games claimed Apple had an illegal monopoly of the market.

After that, the commission fee was slashed in half for most independent app developers and small businesses.

When the EU’s Digital Markets Act takes effect in 2023, it could open up mobile platforms by allowing users to install apps from alternative stores, and ensure app store providers don’t favor their own products or services over third-party developers’ offerings.