Apple has unveiled a sweeping plan to remove some of the competitive barriers it has erected around its lucrative iPhone franchise.
The announcement Thursday comes as it moves to comply with upcoming European regulations aimed at giving consumers the choice to use alternative app stores.
The overhaul, due to take effect in early March, includes concessions that Apple had previously refused to make on its app store, including reducing the fees it collects from developers in Europe.
Most notably, for the first time, Apple will allow iPhone users in Europe to switch to app stores other than the company-operated store installed on the mobile device. It will also allow developers to offer alternative payment systems that allow them to make more money while lowering their prices.
But Apple says it believes opening the iPhone to outsiders will also increase the chance that consumers who venture outside its own system will be exposed to hackers and other security vulnerabilities. It says it is taking what it considers a risky step just to comply with European rules that come into effect on March 7.
The revisions also include a reduction in the commission from 15% to 30% that Apple plans to continue charging the rest of the world for in-app transactions completed on the iPhone.
In Europe alone, Apple is reducing commissions on in-app transactions to 10% to 17% for developers who choose to stay within the company’s payment processing system. Apple does not collect commissions on in-app transactions completed through alternative payment systems.
That’s in stark contrast to Apple’s compliance with a court ruling that took effect last week requiring iPhone apps to provide links to various payment options in the US. If an in-app transaction is completed outside of Apple’s system in the US, the company plans to collect commissions of 12% to 27% to prevent freeloading on its iPhone software. Apple will continue to charge 15% to 30% on app transactions made through its payment system in the US