Summary
- EU tightens grip on Big Tech like Apple to promote more open approach and break monopoly.
- Apple faces scrutiny for App Store policies, accused of restricting developers and excessive fees.
- Non-compliance investigation may lead to further regulatory action against Apple under DMA.
Since the implementation of the Digital Markets Act (DMA) in 2023, the European Union has tightened its grip on Big Tech companies to force them to adopt a more open approach on the continent and break their monopoly. Among others, Apple has faced more scrutiny from EU lawmakers, forcing the iPhone maker to adopt an Android-like approach in the EU and allow practices such as sideloading, which were previously prohibited on its devices.
I tested Apple’s EU-only iOS 17.4, and it doesn’t feel any closer to Android (yet)
The EU forced Apple to open up its platform, but there isn’t much to see right now
Despite Apple’s efforts to comply with the DMA, the company finds itself once again in the crosshairs of the EU. The company’s comliance with the Digital Markets Act (DMA) has again become the battleground in their ongoing conflict, with even Apple’s iPads potentially being subjected to DMA rules in the future.
According to the European Commission report, Apple’s App Store policies have been deemed to breach DMA rules. The commission has accused Apple of preventing developers from freely offering alternative channels to customers, initiating a new non-compliance procedure against the company. The focus of the accusation is on Apple’s requirements for third-party app developers and app stores, particularly the Core Technology Fee.
The EU is again accusing Apple of breaching the DMA
The EU lawmakers discovered that Apple’s steering rules for the App Store don’t let developers freely steer their customers to alternative distribution channels or communicate with them.
Moreover, the link-outs allowed by Apple are still subject to many restrictions from the company side that limit developers’ ability to communicate, promote, and conclude contracts with their customers. The European Commission also noted that Apple’s fees for every purchase of digital goods or services a user makes are excessive. The commission will adopt a “non-compliance decision” within 12 months, a decision that could potentially lead to further regulatory action against Apple.
The EU’s new non-compliance investigation into Apple will also investigate the App Store’s compliance with DMA rules. Most notably, Apple’s complicated procedure for sideloading apps is under scrutiny. This refers to the process that Apple requires users to go through to install apps from sources other than the App Store, a process that many developers and users find cumbersome and restrictive.
According to the EU’s definition, Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft are labeled as gatekeepers, meaning their platforms have at least 45 million monthly active users in the EU and their market cap exceeds 75 billion euros ($81.7 billion).
Gatekeeper companies, including Apple, are under strict scrutiny to comply with the DMA rules, with potential fines of up to 10% of their global annual revenue. While the effectiveness of these rules in the browser market is evident, their impact on the smartphone segment remains a question, with concerns about the potential stifling of competition and product uniqueness.
