This week the out-of-app story shifted from principle to proof: Apple both contested new steering rules in the UK and, for the first time, tied regulatory and DTC changes to slowing Services growth. Meanwhile, enablement tooling and alternative distribution kept advancing across Japan and Brazil — turning the theoretical case for DTC into concrete launch decisions.
Japan's JFTC publishes first Smartphone Act compliance reports from Apple and Google
On July 27, 2026, Japan's Fair Trade Commission (JFTC) published the first "compliance reports" submitted by operators designated under the Smartphone Software Competition Promotion Act (Act No. 58 of 2024) — namely Apple Inc., iTunes K.K., and Google LLC. Per the JFTC, the reports cover fiscal 2025, i.e., the period from the law's full enforcement date of December 18, 2025 through March 31, 2026, the first reporting cycle. The JFTC stressed that the published reports reflect only the designated operators' own views, not the Commission's, and it opened an information/opinion form and a violation-reporting form to gather input on the operators' dealings with app businesses. Japanese outlets covering the release reported that app-developer groups and experts criticized Apple's and Google's newly reported fee structures as showing little meaningful improvement.
Why it matters: Japan's Smartphone Act is the regime that already forced alternative app distribution and external payments onto iOS there. The early emergence of criticism over fee levels has reaffirmed that the reasonableness of costs associated with external purchases is an important issue in the app market. The JFTC is accepting submissions to better understand transactions between designated platform operators and app businesses, as well as the views of relevant stakeholders. For app businesses, this provides an opportunity to share their experiences and perspectives on fee transparency and the conditions for adopting DTC models.
Sources: JFTC (primary) — (令和8年7月27日) スマホソフトウェア競争促進法に基づく遵守報告書の公表について, Asahi Shimbun — グーグル、アップルを規制するスマホ新法の効果いかに？ 初の報告書 (Yahoo!ニュース mirror)
Apple fights UK's plan to force open App Store "steering" to outside payments
Apple filed a formal response to the UK Competition and Markets Authority's (CMA) consultation, arguing that proposed rules letting developers steer users to external payment options amount to price regulation and would give the regulator a "highly intrusive" role in its business. Under the CMA's proposal, developers could direct users to their own stores and websites, and any resulting "steering fee" would have to be fair, reasonable, and below current App Store commission rates, with savings expected to accrue to developers or consumers. Currently, unlike in the US and EU, UK developers can't officially steer customers to external payment links at all, though many have found workarounds. The CMA gained this power after designating Apple and Google as having "strategic market status" in 2025. Apple said the App Store generated £46.5bn in UK billings in 2025 with commissions under 3.5% of that total, while AppleInsider reported Apple's filing said the store facilitated over $60bn for the UK in 2025 and that there is no evidence the changes would lower prices. The CMA rejected the "price regulation" framing, saying it is setting fairness principles rather than fixing fees; a final decision is pending after the consultation closed in late July.
Why it matters: This is the single biggest near-term regulatory lever on out-of-app monetization in the UK — a market currently closed to official steering. If the CMA prevails, UK publishers would gain EU-/US-style rights to route players to DTC web shops and external checkout under a capped, "fair and reasonable" steering fee, though Apple's pushback signals a drawn-out fight and continued uncertainty on timing.
Sources: Reuters (originating report, referenced by all three below) — Apple says UK App Store proposal amounts to price regulation, 9to5Mac — Apple pushes back against UK proposal to loosen App Store payment rules, AppleInsider — UK is asking for 'highly intrusive' controls over App Store, says Apple, Mobilegamer.biz — Apple hits back at UK regulator's attempt to open up the App Store
Apple says out-of-app/regulatory changes are starting to dent Services growth (Q3 FY2026)
On Apple's July 30 earnings call, CFO Kevan Parekh said regulatory changes to the App Store business model are beginning to affect Services growth. Apple reported $30.7 billion in Services revenue, a record for a third fiscal quarter; although that was up 12% year over year, it marked the segment's first sequential decline since 2022, down from $30.98 billion in the previous quarter, and was Apple's slowest Services growth since Q2 2025. Parekh cited factors that impacted App Store performance, including headwinds in mobile gaming, App Store business-model changes "in certain countries," and continuing to operate under a US court ruling affecting link-out transactions, adding that Apple is pleased the Supreme Court will hear its appeal. He noted the App Store still set a June-quarter revenue record, and that the prior-year F1 movie release skewed the comparison. Apple has had to allow alternative distribution/payments in Japan, Brazil, and the EU, and is temporarily barred from charging commission on external-link purchases in the US pending the Epic case.
Why it matters: This is the first time Apple has publicly tied out-of-app and regulatory changes to a measurable Services deceleration — evidence that DTC/link-out shifts are moving real revenue off-platform. For publishers, it strengthens the case that the out-of-app channel is now material, and that the US commission question headed to SCOTUS will shape future economics.
Sources: 9to5Mac — Apple says App Store regulatory changes are beginning to affect Services growth
Fortnite returns to iPhone in Brazil via the Epic Games Store — with an out-of-store discount
On July 30, 2026, Epic launched the Epic Games Store on iPhone in Brazil, bringing back Fortnite and Rocket League Sideswipe. Epic is offering 20% back in Epic Rewards on Fortnite purchases made through the Epic Games Store — a discount Epic says Apple's rules prevent it from offering on the App Store in Brazil. Epic also criticized a multi-step install process, saying Apple has intentionally designed policies to undermine competition from third-party app stores by imposing anticompetitive fees, "scare screens" that create a burdensome install flow, and banning alternative stores on iPads. Epic said these are similar to tactics it saw in Japan and that it has shared with the Brazilian competition regulator how detrimental the requirements are to a competitive iOS ecosystem.
Why it matters: Brazil is now another market where an alternative store plus out-of-store pricing undercuts App Store commission economics — a concrete example of passing platform savings to players outside Apple's billing. The friction Epic flags (install steps, "scare screens") is the practical counterweight that still limits out-of-app conversion, a key input for anyone modeling DTC uptake in newly opened markets.
Sources: Epic Games Store (primary announcement) — Epic Games Store comes to iPhones in Brazil with Fortnite and Rocket League Sideswipe, 9to5Mac — Fortnite returns to iPhone in Brazil with Epic Games Store launch
The takeaway
The pattern this week is convergence: This week’s developments made it clear that out-of-app commerce is moving beyond a regulatory possibility and becoming a practical option that can influence platform revenue and pricing strategies. Regulators in the UK, Japan, and Brazil are advancing market-opening measures, while payment service integration is being simplified from a major development project to a dashboard-based setup. Apple’s own earnings commentary also indicates that revenue is beginning to shift off-platform. The open questions are less about whether out-of-app is viable and more about how much gatekeepers can still charge on it and how much install friction erodes conversion. Publishers should treat DTC as a market-by-market decision, watching the CMA's final steering ruling and the US SCOTUS case, and pressure-test where local payment coverage and a smooth checkout actually beat the store cut. From an MoR vantage point, that operational layer — tax, fraud, compliance, and local methods handled for you — is what turns a newly opened market into realized revenue.
