Apple is opening small cracks in the iPhone’s digital fortress as part of a tougher regulatory push in Europe that aims to give consumers more choice – at the risk of creating new opportunities for hackers to steal personal and financial information stored on the devices .
The overhaul, which is rolling out only in Europe on Thursday, represents the biggest changes to the iPhone’s App Store since Apple introduced the concept in 2008. People in Europe can, among other things, download iPhone apps from stores not operated by Apple and get alternative apps. ways to pay for in-app transactions.
European Union regulators hope that changes imposed by the Digital Markets Act (DMA) will loosen the control Big Tech’s ‘digital gatekeepers’ have gained over the products and services consumers and businesses use as they increasingly become more dominant forces in everyday life.
The measures come into effect just days after EU regulators fined Apple almost $2 billion (1.8 billion euros) for thwarting competition in the music streaming market.
Apple has lashed out at the new regulations for creating unnecessary security risks for iPhone users in Europe, exposing them to more scams and other malicious attacks launched from apps downloaded from outside their ecosystems and raising the specter of even more unsavory services that sell pornography, illegal drugs and other items. content that the company has long banned from the App Store.
Despite efforts to maintain security safeguards while adhering to new rules in the 27-nation bloc, Apple warns that “the changes required by the DMA will inevitably create a gap between the protections that Apple users outside the EU can rely on and the protection available to users in the EU in the future.”
But some smaller tech companies, such as music streaming service Spotify and video game maker Epic Games, view Apple’s DMA compliance as little more than a facade that makes a “mockery” of the regulations’ intentions.
“Rather than creating healthy competition and new choices, Apple’s new terms will create new barriers and strengthen Apple’s stronghold over the iPhone ecosystem,” Spotify, Epic and more than two dozen other companies and alliances wrote in a March 1 letter to the European Commission, the EU executive branch that oversees the DMA.
Epic, which is behind the popular Fortnite game, also claims that Apple is already blatantly violating the DMA by rejecting an alternative iPhone app store it wanted to release in Sweden. Epic claimed that Apple thwarted its attempt to compete in retaliation for scathing criticism from CEO Tim Sweeney, who led a largely unsuccessful antitrust case against the iPhone App Store in the US.
Regulators have so far not objected to the changes Apple is making to an iPhone software update that aligns with the DMA.
Europe’s changing digital landscape is also forcing changes at other tech powerhouses like Google and Facebook, but the new regulations strike at the heart of Apple’s philosophy of maintaining ironclad control over every aspect of its products.
This “walled garden” approach, coined by late co-founder Steve Jobs, starts with the meticulous design of the hardware and then extends to all the software that powers the devices and oversees the commerce that takes place on them.
The approach built an empire with annual sales of nearly $400 billion — a measure of success that Apple traces directly back to the trust it built through decades of vigilant stewardship of the iPhone and other popular products like the iPad, Mac and Apple Watch.
Even Epic’s Sweeney acknowledged that one of the reasons he uses an iPhone is because of the strict security measures Apple has implemented to thwart hackers and protect the privacy of its customers. This came during testimony in a trial in May 2021, resulting in a US judge ruling that the App Store is not a monopoly.
In that decision, the judge demanded that Apple allow links to third-party payment options in iPhone apps in the US. It’s a requirement the company began allowing earlier this year after the U.S. Supreme Court declined to hear an appeal on the issue.
Apple still doesn’t allow alternative iPhone app stores in the US and more than 100 other countries outside the EU.
European regulators appear convinced that the benefits consumers can reap from more competition will outweigh the increased safety risks.
One potential positive is lower prices for digital transactions within apps if competing stores charge lower commissions than the 15 to 30% fees Apple has imposed for years.
But critics doubt this will happen as Apple still plans to charge fees after app downloads reached relatively low barriers and created other hurdles that will make it difficult for alternative options to make significant inroads in Europe.
For its part, Apple insists that the security issues hatched by the DMA are so concerning that the company has heard from government agencies (particularly those involved in defense, banking and emergency services) wanting to ensure they can block employees using iPhones of accessing apps distributed from outside Apple’s walled garden.
“These agencies have all recognized that sideloading – downloading apps from outside the App Store – can compromise security and compromise government data and devices,” Apple said.
