European legislators have tentatively agreed on a new rule that would require Apple to provide users access to third-party app stores and allow sideloading of programs on iPhones and iPads, among other sweeping measures aimed at making the digital economy more competitive and fair.
On Friday, the European Council and Parliament announced that they had reached a political agreement on the Digital Markets Act (DMA), which will target many of the services provided by internet companies and require them to open up to other firms.
According to the EU, services such as WhatsApp, Facebook Messenger, and iMessage will be required to open up and interoperate with smaller messaging platforms if they so request. Users of small and large platforms would be able to send messages, send files, and make video calls across messaging apps, increasing their options.
Apple would also be obliged, under the new DMA, to open up its App Store to third-party payment choices rather than forcing consumers to use Apple’s own payment system, something it battled hard against in the Apple vs. Epic Games trial.
Apple would also have to allow customers to delete the Safari browser and other standard programs, allowing them to replace them with third-party alternatives if they so desired.
The DMA’s vast scope includes a number of other requirements that tech businesses must follow, all of which will undoubtedly have an influence on Apple’s services and platforms on several levels.
Companies worth more than €75 billion ($83 billion), with yearly revenues of €7.5 billion and at least 45 million monthly users, will meet the proposed law’s gatekeeper requirements, among them are: ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription, ensure the interoperability of their instant messaging services’ basic functionalities, and allow app developers fair access to the supplementary functionalities of smartphones.
If a gatekeeper breaks the rules given out in the Act, it faces a fine of up to 10% of its total global turnover, according to the DMA. A fine of up to 20% of the company’s global turnover may be imposed if the crime is repeated.
The European Commission can start a market inquiry and apply behavioral or structural remedies if a gatekeeper consistently fails to comply with the DMA (or violates the requirements at least three times in eight years).
According to Cédric O, French Minister of State with responsibility for digital, the European Union has had to issue record fines for certain damaging business practices by extremely major digital firms during the last ten years.
The DMA will outright prohibit these methods, paving the way for new entrants and European enterprises to compete on a more level playing field.
These regulations are critical for stimulating and unlocking digital markets, increasing consumer choice, improving value sharing in the digital economy, and fostering innovation. The European Union is the first to take such bold steps in this direction, and hopefully, others will follow suit shortly.
The legislation’s wording has yet to be completed, but once it is, it will need to be approved by the European Parliament and the Council. The regulation must be put into effect within six months of its enactment. Margrethe Vestager, the European Commission’s commissioner for digital competition, stated today that she expects the DMA to go into effect “sometime in October.”
If the Digital Markets Act passes, Apple will have to make significant changes to its iPhone and iPad platforms in order to comply with the requirement to enable non-App Store apps. Apple expressed concern that various aspects of the DMA will expose our users to needless privacy and security risks.
Apple is also facing antitrust legislation in the United States, with House lawmakers drafting antitrust laws in June that, if passed, would drastically alter the digital industry.
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