Starting from March 6th, Apple is obligated to adhere to the DMA regulations on sideloading apps, in-app payments, and more.

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Starting from March 6th, Apple is obligated to adhere to the DMA regulations on sideloading apps, in-app payments, and more.
According to a report by Reuters, five major U.S. tech companies, namely Amazon, Apple, Google, Meta (formerly Facebook), and Microsoft, have acknowledged that they meet the European Union’s (EU) criteria for being classified as “gatekeepers.” This classification subjects them to stricter regulations. Additionally, Samsung and ByteDance, the parent company of TikTok, are also considered gatekeepers by the EU, although the latter disagreed with this categorization. Booking.com, an online travel agency, has stated that it will be designated as a gatekeeper tech firm in the following year.

Apple, Google, Amazon, Meta, Microsoft, Samsung, and ByteDance fall under the category of gatekeepers as defined by the DMA

The importance of being classified as a gatekeeper stems from the EU’s Digital Markets Act (DMA), which came into effect in November. Under the DMA, companies with over 45 million monthly active users and a market capitalization of at least 75 billion euros ($82 billion) are considered gatekeepers. Consequently, these firms are required to enable their messaging apps to work with competing platforms and allow users to determine which apps come pre-installed on their devices.

Gatekeeper companies like Apple and Google are prohibited from giving preferential treatment to their own services and apps over those of their competitors. They cannot prevent users from deleting apps that are pre-loaded onto their devices by gatekeeper companies. Non-compliance with the DMA can result in fines of up to 10% of a company’s annual global revenue. Based on Apple’s fiscal 2022 worldwide revenue, the company could face a fine of $39 billion for failing to adhere to DMA regulations.
Theoretically, the DMA could compel Apple to permit third-party app stores on its iPhones and require the company to allow iPhone users to install apps from third-party iOS app storefronts. Apple has consistently argued that its closed ecosystem is necessary to ensure the security of all apps downloaded onto its devices and reduce the risk of users unintentionally installing malware on their phones or tablets.

The DMA may force Apple to stop mandating developers to use Apple’s in-app payment platform

The DMA could also prevent Apple from requiring app developers to exclusively utilize its payment system for in-app payments and subscriptions. Apple currently takes a commission of up to 30% on payments processed through its platform. While Google similarly charges a commission for in-app payments via its payment processing platform, it allows apps to be sideloaded on Android devices.

The EU’s Digital Market Act is set to bring significant transformations to the mobile industry in certain parts of Europe.

The gatekeeper companies must provide the EU with data by September 6th to confirm their designation. If confirmed, they will have six additional months until March 6th to comply with the regulations. Thierry Breton, the EU’s industry chief, emphasizes that Europe is reorganizing its digital landscape to better protect EU citizens and foster innovation for EU startups and companies.

ByteDance argues against being considered a gatekeeper, stating that while it meets the qualitative criteria, it does not fulfill the requirement of being an “unavoidable platform for conducting online business in the EU” or an “entrenched” gateway between consumers and businesses. On the other hand, Booking.com anticipates meeting the qualifications for being labeled a gatekeeper by the end of this year.

Please note that the DMA solely applies to devices, apps, and services acquired in EU member countries. Given that the United Kingdom exited the EU on January 31st, 2020, devices in the UK are not subject to the DMA’s antitrust legislation. The EU currently consists of 27 member countries.

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