Here's How Apple Could Open Its App Store Without Really Opening Its App Store

And what we can do about it.

With this year’s passage of the EU’s Digital Markets Act (DMA), very large online platforms - those with EU revenues of  €75 billion or more and at least 45 million EU users  - will have to open up their devices to rival app stores. 

While this has implications for game consoles, the main attraction is the mobile market, specifically Apple’s iOS-based mobile devices: iPhones, iPads, iPods and Apple Watches. These devices are locked to Apple’s official App Store, and EU law prohibits the public from modifying them to accept alternative app stores from other vendors, under Article 6 of 2001’s EU Copyright Directive (EUCD).

With the public unable to legally reconfigure their devices to use rival app stores, we are dependent on Apple’s permission if we want to get our iOS apps elsewhere, and, according to a Bloomberg report, that’s just what Apple is about to do.

Though Apple hasn’t formally announced a plan to open its devices to rival app stores (and indeed, has not yet affirmed that it will comply with the DMA at all), Bloomberg’s Mark Gurman cites multiple Apple employees who provide early details of the plan.

Apple Protects Its Customers, Just Not At the Expense of Its Investors

As ever, the devil is in those details. Apple’s App Store does a generally excellent job of protecting users from malicious code, privacy invasions and deceptive practices, but not always. Like any company, Apple will sometimes make mistakes, but the risk to Apple customers is by no means limited to lapses and errors.

Apple’s commitment to its customers’ privacy and integrity is admirable, but it’s not absolute. Apple continuously strikes a balance between its customers’ interests and Apple’s shareholders’ interests. When the Chinese government ordered Apple to remove working VPNs from the App Store, Apple complied.  When the Chinese government ordered Apple to install backdoors in its cloud backup service, Apple complied.  When the Chinese government ordered Apple to break AirDrop so it couldn’t be used to organize anti-government demonstrations, Apple complied.

On the other hand, when the FBI ordered Apple to add backdoors to its devices, Apple refused - and rightly so. 

This doesn’t mean that Apple values the safety, privacy and free expression rights of its Chinese customers less than it values the safety, privacy and free expression rights of its American customers.

Rather, it’s that the Chinese government can harm Apple’s shareholders worse than the American government can: if Apple was denied access to low-waged Chinese manufacturing and 350 million middle-class Chinese consumers, it would have to pay much more to manufacture its products, and it would sell far fewer of them: none in China, and fewer elsewhere, thanks to the higher prices it would have to charge.

The App Tax

Even when powerful governments aren’t involved, Apple sometimes puts its shareholders ahead of its customers: the company’s policy of charging very high payment processing fees (30% for large businesses, 15% for some small businesses) means that some products and services simply can’t be offered at all without losing money. For example, the wholesale discount on audiobooks is 20%, so a bookseller that makes its wares available through an iOS app will lose money on every sale. 

In the case of audiobooks, Apple uses its high fees to clear the field of competitors for its own product, Apple Books, which sells books that are permanently locked (through Digital Rights Management) to Apple’s platform. 

Incredibly, that’s the best outcome of Apple’s “app tax.” In other cases, companies simply pass on Apple’s commission to Apple’s customers by rais