Setapp Mobile Shuts Down, Raising Hard Questions About the Viability of Apple’s DMA-Era App Economy

One of the most visible attempts to build an alternative iOS app marketplace under the European Union’s Digital Markets Act is coming to an end, underscoring how difficult it remains for developers to operate outside Apple’s App Store, even after regulatory intervention.

Ukrainian software firm MacPaw is shutting down Setapp Mobile in a decision seen as one of the clearest stress tests yet of the European Union’s attempt to prise open Apple’s tightly controlled iOS ecosystem. While the Digital Markets Act (DMA) was designed to enable alternative app distribution and weaken Apple’s gatekeeper power, Setapp’s exit suggests that regulatory access alone may not translate into a commercially sustainable market.

Setapp Mobile, which launched in September 2024, was among the most ambitious alternative app stores to emerge under the DMA. Unlike single-publisher stores or niche offerings, it attempted to recreate its successful desktop subscription model on iOS, bundling dozens of third-party apps into a single €9.99 monthly subscription for EU users. It promised predictable revenue and discovery outside Apple’s App Store for developers, while for users, it offered simplicity and cost savings.

That model will now end on February 16, 2026, when all mobile apps are removed from the platform. MacPaw says its desktop subscription service is unaffected, underlining that the problem lies squarely within Apple’s mobile ecosystem rather than with Setapp’s broader business.

At the core of Setapp’s decision are Apple’s revised EU business terms, introduced in response to the DMA. While Apple technically complied with the law by allowing alternative app stores and sideloading, it simultaneously introduced a complex and shifting fee structure that many developers argue undermines the spirit of the regulation.

The most controversial element is the Core Technology Fee, which charges €0.50 for every first annual install above one million within a 12-month period. Apple argues the fee is necessary to recover investments in iOS infrastructure and security. Developers counter that it effectively penalizes success and makes scaling unpredictable.

For a subscription-based marketplace like Setapp, that unpredictability is especially acute. Subscription services rely on steady user growth to spread fixed costs and improve margins. Under Apple’s framework, rapid growth risks triggering fees that are difficult to forecast and hard to pass on to users without eroding the value proposition. That dynamic turns growth from an advantage into a financial risk.

MacPaw’s public explanation points directly to this problem. The company said “still-evolving and complex business terms” made Setapp Mobile incompatible with its current business model, adding that the commercial conditions continued to change. The language reflects a broader frustration across the developer community: rules that are revised frequently make it difficult to plan pricing, investment, or long-term product strategy.

The shutdown also exposes a wider structural issue with Apple’s DMA compliance. While alternative app stores are now permitted, they must still operate within Apple’s technical, contractual, and financial boundaries. Apple continues to control key elements of the platform, including iOS security architecture, user permissions, and core system APIs. That control limits how far alternative marketplaces can differentiate themselves from the App Store experience or reduce their reliance on Apple.

As a result, only certain types of players appear able to survive. Epic Games’ iOS store, for example, is backed by a company willing to absorb losses and legal costs as part of a broader strategic fight with Apple. AltStore, an open-source project, operates at a much smaller scale with different expectations around profitability. Setapp, by contrast, was attempting to build a mid-scale, commercially sustainable business. Its failure highlights how narrow that middle ground may be.

There are also geopolitical and industry context layers to Setapp’s exit. MacPaw, based in Ukraine, has continued operating through years of war-related disruption while expanding internationally. Setapp Mobile was meant to be a growth engine in one of the world’s most tightly regulated tech markets. Its closure underscores how regulatory complexity, rather than market demand, can become the decisive constraint on innovation.

The shutdown may raise uncomfortable questions for EU regulators. The DMA’s goal was not merely to allow alternatives in theory, but to foster genuine competition. If alternative app stores can exist only at the margins or with exceptional financial backing, regulators may face pressure to reassess whether Apple’s fee structures and contractual terms are consistent with the law’s intent.

Apple, for its part, maintains that it has complied fully with the DMA and that its fees are justified. The company has argued that operating system development, security updates, and user protections require substantial ongoing investment. But Setapp’s experience strengthens the argument that compliance focused on formal checklists, rather than economic outcomes, may fall short.

However, the DMA has opened doors for developers, but walking through them carries new risks and costs. The failure of one of the most polished and consumer-friendly alternative stores suggests that many developers will remain cautious, sticking with Apple’s App Store not because it is ideal, but because it remains the most predictable option.

In that sense, Setapp Mobile’s shutdown is less about a single product and more about the unresolved tension at the heart of Europe’s tech regulation push. Access has improved. Choice exists on paper. Yet the economics of the iOS ecosystem still appear heavily shaped by Apple’s priorities.

Unless that balance shifts, Setapp’s exit may come to be seen not as an isolated retreat, but as an early signal that meaningful competition on iOS remains far harder to achieve than the DMA’s architects anticipated.