Apple recently announced a significant change in its app distribution policy in the European Union (EU), allowing for the download of third-party apps outside of its proprietary marketplace. This decision, although limited to a select group of apps, has garnered attention from industry stakeholders who believe it could have global implications, including in India.

A New Way to Distribute Apps

According to a blog post by Apple, the company's new approach enables developers to distribute apps directly from their own websites. However, this privilege is currently reserved for developers who have been on Apple's app store for at least two years and have apps with a minimum of 1 million downloads. These developers will be able to create alternative marketplaces accessible through web browsers. It's important to note that Apple will still charge a service fee for allowing third-party app downloads and distribution, indicating that the company has not completely relinquished control over its app ecosystem.

Limitations and Transparency Requirements

Under Apple's policy, developers can only distribute their own apps and are not permitted to create a marketplace for downloading any app. Additionally, developers must publish transparent data collection policies. While the first 1 million downloads from a third-party app store will be free, Apple will charge a 'core technology fee' of EUR 0.50 (₹45) per installation beyond that threshold annually.

Implications for India's Tech Industry

Industry stakeholders and experts believe that Apple's decision in the EU could set a precedent for how Big Tech regulation unfolds in India. Startups and regulators in India have been advocating for viable alternatives to the dominant offerings of companies like Google and Apple. The move by the European Union to allow third-party app marketplaces may lend credibility to India's demand for a more open and flexible internet economy. Rameesh Kailasam, CEO of IndiaTech.org, an industry group representing startups, emphasizes that this development can influence how Indian startups and regulators approach Big Tech firms and their service fees.

Startups Challenging Google and Apple

Homegrown startups in India have been vocal about their concerns regarding the app distribution policies of Google and Apple. Recently, startups submitted a letter to the Ministry of Electronics and Information Technology (Meity), challenging Google's suspension of apps due to non-compliance with service fees. The letter highlighted the arbitrary nature of app distribution policies set by these tech giants, which often result in unfair practices and limited market access. The startups argued that Google and Apple act as the sole decision-makers, eliminating consumer choice and hindering competition.

Apple's 'Walled Garden' Approach

Apple's move to allow limited third-party app distribution in the EU aligns with the company's longstanding defense of its mobile ecosystem's 'walled garden' approach. During a high-profile antitrust appeal in the US against Epic Games, Apple's senior vice-president of software engineering, Craig Federighi, emphasized the security advantages of Apple's mobile ecosystem compared to open platforms like Android. Apple's victory in the legal battle further solidified its control over the distribution of apps on its App Store.

Legal Perspective and Commercial Practices

While the European Union's decision may serve as a precedent for similar regulatory approaches in other markets, it does not necessarily imply a one-size-fits-all solution. Legal consultants representing Big Tech firms in India argue that Apple's move in the EU was specific and not a response to arbitrary demands for free features. They state that Apple and Google have the right to establish their own business models and charge reasonable fees. Furthermore, no Indian courts or regulators have demanded such changes from Apple or Google.

The Road Ahead

While the European Union's move sets a positive precedent, it remains to be seen how Indian regulators and courts will address the concerns raised by startups. The demand for a more open and competitive app marketplace in India continues, and stakeholders will closely observe the developments in the EU as they assess potential solutions for the Indian market.