Europe is paving the way for Apple App Store changes in Australia for app developers

Significant changes that Apple was forced to make to its App Store in Europe will likely pave the way for similar reforms in Australia.

In the biggest changes to the App Store since it was launched, Apple relinquished some control over its platform earlier this month in response to the Digital Markets Act in the European Union.

Under the changes, Apple will allow the existence of alternative app marketplaces and payment systems for app developers.

In Australia and other jurisdictions, iOS apps can only be downloaded using Apple’s in-app purchasing system.

Apple also announced 600 new APIs, expanded app analytics, functionality for alternative browser engines, and options for processing app payments and distributing iOS apps.

The changes are the result of Apple’s App Store being designated as a “core platform service” under the European Commission’s Digital Markets Act.

But app developers that choose to use a different payment system to Apple’s will still have to pay Apple a commission.

Apple has also warned that opening up its App Store could lead to cyber security risks.

“The new options for processing payments and downloading apps on iOS opens new avenues for malware, fraud and scams, illicit and harmful content and other privacy and security threats,” Apple said in a blog post.

Moves are afoot for similar changes to be forced on Apple in Australia, with an ongoing competition watchdog inquiry and growing calls for digital rights advocates for changes.

Electronic Frontiers Australia chair John Pane said this could come to a head next year when the Australian Competition and Consumer Commission (ACCC) hands its final report on digital platforms to the federal government.

“The body of work is well under way in Australia with the digital platforms inquiry,” Pane said.

“The report is due next year, and the second interim report did find some market power and competition concerns and they will probably require some further investigation before Australia makes a policy position on this.

“Apple is slowly being dragged kicking and screaming to the table.”

Australia will also have the chance to learn from the implementation of the App Store changes in the EU.

There are concerns that developers may end up paying a bigger commission to Apple if their app is downloaded from a different app store.

“There are some question marks around what Apple has proposed in terms of complying with the Digital Services Act that impacts developers financially and really requires someone to do the maths on that,” Pane said.

“It still may not be quite fair for developers, but Apple seems to be arguing the case that by allowing this it may result in deteriorating security.

“That’s reasonable but for Apple to say there are concerns remaining about side-loading due to safety, trust and security – why then did Apple allow its Macs to be able to access applications and programs from a range of vendors?”

The ACCC released an interim report in 2021 focusing on competition issues surrounding app stores such as Apple’s App Store.

The competition watchdog found that app developers need fair and reasonable terms when dealing with these app stores, and improved processes for the approval of apps into them.

It found that the likes of Apple and Google have significant market power in the distribution of mobile apps, and that government reforms are needed to address them.

These reforms included giving consumers the ability to rate and review all apps, the ability to change pre-installed default apps on their devices and for app developers to provide consumers with information on alternative payment options.

In late 2022, the ACCC advised the government to launch a code of conduct to address anti-competitive behaviour on app stores, including through self-preference, unfair business dealings and impediments to interoperability and the ability of users to switch services.

These reforms are unlikely to be launched before a landmark lawsuit to be heard this year between Epic Games, the maker of Fortnite, and Apple and Google over its app store and in-app purchases policies.

Late last year, a US court found that Google was operating its app store and payments system as an “illegal monopoly”, with a jury finding unanimously that the tech giant had stamped out competing app stores and was charging unjust fees to app developers.

Epic’s similar case against Apple and Google will be heard together in Federal Court next month, along with a class action on behalf of app developers and consumers.