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New EU digital regulations will worsen the experience of users of Apple’s products and expose them to security risks, a senior executive at the iPhone maker has claimed.
Phil Schiller, who heads up Apple’s App Store, on Thursday said the bloc’s new Digital Markets Act is forcing it to make changes that will make the user experience not “as good as it is in the rest of the world”, adding the tech giant will become slower to identify and react to scams.
Apple is making historic changes to its iOS mobile software, App Store and Safari browser, in moves to placate EU regulators after long resisting such steps.
The moves will allow users to access rival app stores and download apps from other sources, more easily access alternative payment systems, and cut fees for app developers.
But Schiller, an Apple veteran who once ran its marketing machine, said the moves to break the company’s closed ecosystem for software will undermine the privacy and security the company has worked to build into its products and services.
“This isn’t our first choice,” he said. “We always want to have the highest standard everywhere in the world but we also have the requirement to meet the legal requirements in the local markets.
“In the App Store we have a lot of signals that we are looking for every day to find scams and stop them,” Schiller said. “With these new marketplaces we won’t have visibility into those issues.”
Schiller’s complaints come as a deadline to comply with the DMA looms. The EU requires large tech companies, including Google, Amazon, Meta and Microsoft, to inform Brussels by March how they are complying with the act, in legislation aimed at tackling the market power of Silicon Valley companies.
To adhere to the DMA, Apple plans to introduce a new fee structure in the EU that will slash the amount paid by companies using the App Store to sell digital goods and services from 30 per cent to 17 per cent, it said on Thursday.
However, the company has introduced some new charges, including a “core technology fee” of 50 cents on developers with apps that have more than 1mn users for every first instalment by a user. Apple will also charge an additional 3 per cent fee to app developers that use its payment processor.
Apple has come under increasing pressure from regulators around the world to change the way it runs its iOS ecosystem. Critics say the company charges excessive fees and forecloses competition through its control of how apps are distributed on its devices.
In the US, the Joe Biden administration and legislators have looked at policies to promote competition in digital markets but have stopped short of passing legislation similar to the DMA.
In force since November 2022, the act marks the EU’s attempt to make digital markets more competitive by introducing legal obligations to so-called “gatekeepers” that run the biggest online platforms. The regulations include a requirement to share more data and open their ecosystems to rivals.
That will mean developers will not be obliged to meet Apple’s specific App Store requirements for quality control of content on alternative marketplaces.
“There are risks for developers,” Schiller added. “Will there be other [app stores] that allow copycat apps, pirated versions of apps, and will they have good visibility in the exposure and the visibility of their technology?”
A new “notarisation” system will allow Apple to review apps for malicious content. The company will also allow users downloading apps from alternative sources to avoid being tracked. An “authorisation” system for developers that launch their own app stores on iOS will require them to commit to certain security standards.
The iPhone maker is also making changes to how users select the browser on its devices, presenting them with a choice screen that allows them set an alternative browser to Apple’s Safari as the default on their devices.
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