Apple has acknowledged the inevitable and announced its anticipation of making changes to its App Store policies to align with the European Union’s Digital Markets Act (DMA). The DMA, in effect since May across the EU, signifies a proactive approach by EU lawmakers to address the dominance of Big Tech, recognizing the limitations of traditional competition law enforcement.
In its fiscal year 2023 Form 10-K filing, Apple adjusted the language regarding risk factors, signaling a clear shift in its stance on potential modifications to App Store policies. The company highlighted that these changes could impact how developers are charged for platform access, app distribution outside the App Store, and the communication between developers and consumers within the App Store concerning alternative purchasing methods.
The DMA introduces a preemptive competition regime, targeting designated gatekeepers with specific obligations from the outset. These include allowing business users to promote their offers and prohibiting gatekeepers from preventing the installation of third-party app stores — provisions that directly pertain to Apple’s App Store.
Morgan Stanley analysts, in a recent report, interpreted Apple’s language change as a confirmation of impending App Store modifications. They speculated that Apple might introduce third-party app stores on devices in Europe, expressing confidence in Apple’s ability to compete effectively given the App Store’s security, centralization, and convenience.
The impact of the DMA has already been glimpsed through an antitrust intervention in the Netherlands last year, where local authorities compelled Apple to permit local dating apps to use alternative payment technologies.
This move was in anticipation of the DMA, and while it affected only the Netherlands and dating apps, the DMA’s influence will be widespread across the EU, affecting various types of users.
The deadline for gatekeepers’ compliance with the pan-EU DMA is March 7, 2024, with penalties for infringements reaching up to 10% of global annual turnover, potentially more for repeat offenses. Apple’s acknowledgment of forthcoming changes reflects a broader shift in the regulatory landscape for tech giants operating within the European Union.
