Earlier this year, the European Union directed 22 major tech companies to comply with the Digital Markets Act, including the Cupertino-based tech giant Apple. The Union passed on a ruling in September, giving the company six months to comply. As it turns out, Apple won’t challenge the directives at all. Instead, the company will comply. According to the latest form 10-K submitted to the United States Securities and Exchange Commission, the company “expects to make further business changes in the future.”
What Is The Digital Markets Act?
The DMA aims to improve the access and compatibility of European apps and services, making the industry fair for everyone. The EU created the regulation in November 2022, which came into effect in 2023. Under the DMA, the EU imposes tighter restrictions and laws on the big tech companies, regarding them as the gatekeepers of the digital economy, and encourages competition and innovation.
The DMA scrutinizes companies that cater to more than 45 million monthly users and have a market cap of 75 billion euros or above. For those catching up, it was the EU who proposed a universal charging solution for electronic gadgets like speakers, laptops, and smartphones, directing tech giants like Apple to use USB-C ports on their devices, which is why the iPhone 15 features a USB-C port instead of the Lightning Port.
Here’s What Apple Could Change In Response To DMA’s Directive
One of the most significant changes coming to Apple’s apps business due to the DMA’s orders is that the company has to provide space to third-party app stores on iOS devices, such as iPhones and iPads. Per the DMA, not allowing third-party app stores gives Apple complete control of the apps and services users can install and use on their devices. Hence, it decided to decrease the company’s monopoly and increase competition.
Developers Might Be Able To Contact Customers Outside The App Store
As mentioned earlier, Apple has accepted the DMA’s regulations and is working to bring changes to the App Store. The latest Form 10-K reveals that the changes could affect how Apple charges developers for access to its App Store and how it manages the distribution of apps outside the store. A clause in the form reads how the company expects changes related to how it allows developers to communicate with users inside the App Store.
Currently, the App Store doesn’t allow apps to redirect users to a third-party download or payment page. Remember when Apple blocked Epic Game’s Fortnite from the App Store? The latter had allegedly attempted to bypass the App Store payment system, which allows Apple to charge a commission on all transactions.
The Change Might Affect App Store’s Annual Fee
In the financial form, the company has also mentioned how this change could impact its revenue through the App Store and how it might have to change the annual fee it charges developers. Apple probably saw the ruling coming and started preparing to make the required changes in the App Store. Even so, the company has until March 2024 to roll out the modifications.
In a related update, Google and other European telecom firms have sent a letter to the EU, asking them to look into Apple’s iMessage and whether the service should be more compatible. In the past, Google has repeatedly criticized Apple for sticking with its dated iMessage technology and not adopting the latest RCS service.
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