Apple may split off a EU version of its App Store to deal with the Digital Markets Act

Apple is preparing to split the App Store “in two” in the coming weeks ahead of European Union requirements that will force Apple to enable app sideloading in the region, Bloomberg‘s Mark Gurman reports in the latests version of this “Power On” newsletter. 

He says the tech giant will split off the App Store in the European Union (EU) from the rest of the world. It’s part of Apple’s move to deal with the EU’s Digital Markets Act (DMA). 

Among other things, the DMA will force the company to allow users to utilize third-party app stores and payment systems. It will also force the company to make its Message interoperable with other messaging apps — including WhatsApp, and Facebook Messenger.

If Apple and other companies don’t comply, the European Commission can impose fines of up to 10% of the company’s total worldwide annual turnover or 20% in the event of repeated infringements and periodic penalty payments of up to 5% of the company’s total worldwide daily turnover.

Not surprisingly, Apple strongly opposes the DMA. The tech giant told ABC News on March 25, 2023, that “it was concerned that parts of the Digital Markets Act “will create unnecessary privacy and security vulnerabilities for our users while others will prohibit us from charging for intellectual property in which we invest a great deal.”

The EU is a political and economic union of 28 member states that are located primarily in Europe. Its policies aim “to ensure the free movement of people, goods, services, and capital within the internal market, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries, and regional development.”

Sideloading is the installation of an application on a mobile device without using the device’s official application distribution method. These days, most users acquire their applications through a sanctioned app store, such as Apple’s App Store. 

This info from Gurman is from the free edition of “Power On”. If you like it, consider subscribing to Bloomberg.com—you’ll receive the newsletter earlier and get exclusive access to a Q&A section.