The forgotten app stores: An obituary for great expectations

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Does anyone remember the alternative app stores? That's right, there was something! According to the iPhone manufacturer, they were the looming downfall of Apple's domain and a source of constant public disputes between the iPhone maker and the EU Commission. The bone of contention: The EU, via the Digital Markets Act (DMA), has obliged Apple to allow other businesses to open shop in its virtual marketplace alongside its app store.

The news that Setapp is already closing its app marketplace has likely brought the topic back to the forefront for many. And even though this is just one of four to five known providers, it is quite telling that the first store is closing again before any kind of flourishing phase has even begun.

No enthusiasm generated

Scholars are already debating what the reason might be. Those who consider the DMA a misguided bureaucratic monster with risks and side effects and thus side with Apple see their prophecies confirmed. Others accuse Apple of implementing the DMA's requirements in an unnecessarily complicated way so that nothing could possibly thrive on this toxic ground. Setapp also echoes this sentiment in its reasoning.

The truth, as is often the case, probably lies somewhere in the middle. However, it cannot be denied that the concept of alternative marketplaces devised in Brussels never really generated enthusiasm among developers and users. Most of them likely wished for improvements to existing solutions rather than the creation of new marketplaces.

Why is that?

First and foremost, it's likely that while Europe is a large economic area, in the context of digital markets, even an entity with 440 million inhabitants and immense economic power is not enough on its own for developers to undertake the effort of forging a special path solely for Europe – or now, Europe and Japan. This is also evident in other DMA requirements, such as for browser engines. If even Google, with its immense financial and human resources, is not motivated to launch its browser engine in Europe, who can blame the many small and medium-sized developers for following suit?

What the regulation has achieved

So, was all the regulation for naught? Was there perhaps no classic market failure underlying the state intervention? That is, a situation where users and developers suffer from a problem they cannot solve themselves?

It's not that simple either. The DMA is an attempt to solve a problem that has been lamented by developers – large and small – for years. They complained that the major platform operators, such as Apple and Google, could arbitrarily set sales commissions due to a lack of suitable competitors within their ecosystems. Regulators see competition as a way for the market to stabilize prices at a reasonable level.

Apple tries to reduce this issue to major players like Epic and Spotify. Even before the DMA, Apple created the Small Business Program for smaller developers, offering a way to escape the previously rigid 30 percent fee. However, this did little to address the core criticism.

Not entirely unsuccessful

The DMA has not been entirely unsuccessful in terms of apps. It has led to developers, regardless of their size, benefiting from fee reductions triggered by the regulatory pressure. Apple will, of course, always claim that this is not due to the DMA. On the other hand, the iPhone manufacturer recently admitted in a study it financed itself that developers are benefiting from reduced fees. While 86 percent of these went to developers outside the EU and they do not pass on the savings to buyers, it is stated – thus not primarily strengthening the European Economic Area. However, favoring European companies would have made the DMA contestable and was never its intention.

According to the DMA's interpretation, users would have benefited from lower prices through competition among marketplaces. However, this would presuppose that app stores compete against each other with the same apps. This is not happening in reality, which is why users see no advantage for themselves.

In addition to the slump of alternative app stores, many concerns that Apple raised against the EU order have also dissipated. The feared compromise of security has not materialized so far. Perhaps the introduction of DMA-like rules in Japan is also proceeding more smoothly because Apple brought some insights from the EU – and not just because the Japanese, in Apple's view, proceeded more cautiously.

New main arena: Interoperability

Meanwhile, the main arenas of conflict between Apple and the EU have shifted: there is now a struggle for greater interoperability. In iOS 26.3, new features mandated by the EU are being introduced. And it is to be expected that the EU will carve further inroads into Apple's closed ecosystem. Apple, in turn, will react by introducing new features partly later, partly not at all in the EU – for security reasons, as it claims.

One can laugh at the misfortune of the regulation so far, and one can and certainly should question some things, including the radical approach and the polarization pursued by both sides. However, regulators must fairly be given the chance to first learn what appropriate regulation for digital markets can look like. But citizens can assume that there is indeed a willingness to learn and not just to stubbornly continue. The alternative marketplaces, already forgotten by many, have also reminded us of this.

(mki)