Is it OK to Sell My Apps in the App Store? Activists and Developers say Apple is giving up on EU’s Digital Markets Act

The iPhones acted like tightly controlled supermarkets for over a decade. Developers can only sell their wares when they wander in. Instead, their app needs to pass a vetting process to sit on the shelves of Apple’s lauded App Store. Is it possible for them to sell something within the app to Apple users? That’s fine. For the largest developers, Apple will take a 30 percent cut of every purchase.

Apple is finally opening up the iPhone to sideloading and alternative app stores — at least in the European Union. It is also allowing developers to incorporate third-party payment processor into their apps. This is all part of Apple’s efforts to comply with the EU’s new Digital Markets Act (DMA), and at the surface, these changes make it seem like Apple is giving in to regulatory pressure.

Hey and Basecamp exec David Heinemeier Hansson described the fee as “clearly one of the poison pills” in Apple’s plan. It would be worth it for a company of its size. “It’s still far more advantageous than the insane 30% cut,” he wrote.

Apple is introducing a new fee structure for apps that want to operate on these third-party stores. apps pay no cut of sales to Apple if they are distributed via a third-party store And if a developer still wants to be distributed via Apple’s App Store, too, the cut drops from the traditional 30 percent fee down to 17 percent. The fee was lowered for small businesses to 10 percent, from the original 15 percent. So far, it’s been a better deal.

Apple is finally opening the iPhone to third-party app stores in the European Union, kicking off a potentially vibrant, unwieldy, and eclectic new era for its app ecosystem. It could, depending on the way developers respond to the tiny and immense hurdle of a 0.50 fee.

The fees on smaller apps are particularly tough. An app that’s gone viral can easily surpass 1 million installs, and since a great many apps don’t charge users upfront (or ever), they could quickly burn a lot of cash. That could be a devastating situation for briefly explosive social apps like Clubhouse or BeReal. They would have paid millions for their skyrocketing popularity — and then continue to pay millions as they sit on people’s phones unused.

There are two more complications in all of this: a company has to launch a third-party app store, and developers then have to migrate their users over to that store. Users are not easy to shift from one store to another. The user must first install the new app store, uninstall the old version of the app that was downloaded from Apple’s App Store, and then reinstall the app again through the new app store.

As for the €1,000,000 letter of credit, Testut tells The Verge that it’s a “reasonable” ask from Apple. Testut says that an alternative marketplace comes with a strong responsibility to protect users as it does significantly raise the barrier for entry. “By requiring proof of credit, this ensures marketplaces are at least legitimate businesses, reducing the risk of ‘scam’ marketplaces taking everyone’s money and leaving.”

“As a whole, I view this as positive for the platform,” Testut says. “For the first time ever, entirely new classes of apps can exist on iOS, which I believe will push the platform forward.”

The potential downsides of Apple’s new guidelines aren’t stopping everyone from adopting them. The AltStore app store that lets users sideload apps with their phones is planning to launch in the EU. As per the developer, AltStore is working toward meeting Apple’s requirements so they can allow users to download it directly from their website. Testut says developers will be able to publish their apps for free on AltStore, and that they’ve added a feature called “patreon-exclusive apps” which will enable them to distribute them to just their patrons. AltStore doesn’t plan to charge a commission on Patreon-exclusive apps, either.

But some developers are already responding with criticism about Apple’s new guidelines. Epic Games CEO (and part-time Apple critic) Tim Sweeney notably called out the changes as “hot garbage,” even as Epic announced it would be launching its own app store through them. Apple’s new business terms have some big disadvantages for developers. The new rules would add a new 0.50 to Apple’s commission. Core Technology Fee for apps with over 1 million downloads. Fees for successful apps add up.

The Coalition for App Fairness, a nonprofit organization dedicated to fostering mobile app competition, had a similar response. Executive director Rick VanMeter said the plan “does not achieve the DMA’s goal to increase competition and fairness in the digital market — it is not fair, reasonable, nor non-discriminatory,” adding that the change forces developers “to choose between two anticompetitive and illegal options. Either stick with the terrible status quo or opt into a new convoluted set of terms that are bad for developers and consumers alike.”

David Heinemeier Hansson, the creator of Ruby on Rails and co-founder of Basecamp, says the new guidelines will discourage developers of big apps like Meta from using alternative app stores. “This poison pill is therefore explicitly designed to ensure that no second-party app store ever takes off,” Heinmeier Hansson writes in a post on his blog. “Without any of the big apps, there will be no draw, and there’ll be no stores. The EU will not create competition in the digital markets.

Then, four years ago, lawmakers in Brussels started to listen seriously to complaints by the likes of Spotify about how Apple’s “tax” was stifling competition and limiting consumer choice as they browsed the App Store’s aisles. The European Union has a law called the Digital Markets Act. The former French digital minister explained in a press conference that Big Tech was not broken up. Instead the law was designed to break these platforms open.

The founder and CEO of Proton, a Switzerland-based email and PureVPN provider, said that the new fees and restrictions reinforce the hold of Apple.