The Digital Markets Act (DMA) officially went into effect in the EU last month. That means Big Tech needs to start abiding by this new regulation that intends to spur competition on these companies’ core platforms.
In Apple‘s case, one of the biggest results of the DMA has been to allow “alternative marketplaces,” basically App Store competitors, on the iPhone.
What’s coming for iPhone users in the EU
As The Verge points out, there’s currently just one third-party alternative marketplace on iOS that users in the EU can currently download — a business-to-business marketplace for corporations to distribute their own internal apps called Mobivention.
However, there’s a lot more on the way.
Epic Games, the company behind the super popular Battle Royale game Fortnite, has already shared its plans to soon launch its own alternative marketplace on the iPhone.
In addition, Epic Games has announced they would use this distribution model to get Fortnite back on iOS for users in the EU. The game has been missing from Apple’s App Store for nearly four years after the Fortnite developer and the iPhone maker had a very public falling out over App Store fees and revenue share models.
SetApp by MacPaw is also coming to the iPhone in the EU. Mac users may be familiar with SetApp, a sort of Netflix for Mac apps. The subscription service charges $9.99 per month and allows users to download and use any of the more than 200 third-party Mac apps that are part of its program for as long as they are subscribed. SetApp plans to bring a similar iOS subscription service to the iPhone via its alternative marketplace.
However, as both TechCrunch and The Verge note, an alternative marketplace called AltStore will likely be the first to make it to the iPhone.
AltStore leading the way
AltStore, by developer Riley Testut, has already existed for years as an “alternative marketplace” before the concept officially existed. Testut found a workaround that allowed iPhone users anywhere in the world to sideload AltStore, basically installing it directly to their device via their PC or Mac. Testut found a creative way to make his public App Store alternative work on an iPhone without being distributed via Apple’s official App Store, in a similar way to how businesses install and use internal company apps on employees’ iOS devices.
AltStore comes with preloaded apps like Delta, Testut’s Nintendo emulator and a perfect example of apps that likely would never be approved by Apple for distribution in the App Store.
Testut’s AltStore is currently undergoing Apple’s alternative marketplace review process and will be ready to launch as soon as Apple approves of AltStore.
Once Apple approves, AltStore will be available for “official” download in the EU. The alternative marketplace will have two apps ready to go at launch: the aforementioned Delta game emulator, which will be available for free, and and clipboard manager called Clip.
Testut will require users pay a small fee for Clip, and it appears that this app will be used to test out a very new and unique mobile app subscription model. According to Testut, users will pay for Clip via a $1 or more pledge via the creator monetization platform Patreon.
Patreon allows creators to setup subscription models so that their followers can pay a monthly monetary fee for exclusive content. According to Testut, AltStore will have Patreon directly integrated into it as its payment platform for paid apps. If all works out, Testut plans to allow other developers to distribute their own apps in AltStore and monetize them using the Patreon pledge model
One thing holding back more alternative marketplaces
With the DMA in effect for about a month now, it may seem surprising that we have yet to see a deluge of alternative marketplaces opening on the iPhone for EU users.
However, there’s a good reason we haven’t seen that yet.
When announcing alternative marketplaces, Apple also introduced a new “Core Technology Fee” for developers looking to distribute via these App Store competitors. Instead of paying 15 to 30 percent of app revenue to Apple like they would in the App Store, developers will now be paying €0.50 for every first annual install of their app over 1 million downloads. This includes free apps, meaning that a developer that creates very popular free app can owe Apple money for those downloads — a cost of business that never before existed in Apple’s official App Store. And any developer that wants to distribute apps via alternative marketplaces needs to abide by Apple’s new terms that include this fee.
The EU is already investigating Apple for these new terms and fees to see if they are actually in violation of the DMA.
So, we’ll definitely soon see a number of alternative marketplaces on iPhones in the EU. But based on the results of that EU investigation, we’ll have to wait and see how many actually pop up.
