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Apple Faces Deadline to Comply with Europe’s Digital Markets Act

Apple has been given until March 5 of next year to comply with the Digital Markets Act (DMA) in Europe. The legislation requires Apple to allow either third-party app stores or sideloading of apps by that date. This development comes after Apple confirmed its qualification as a “gatekeeper” under the upcoming law. However, despite this deadline, it is unlikely that significant changes will occur on that specific date.

The DMA is an antitrust measure aimed at technology giants, to foster competition in the industry and facilitate startups’ ability to compete by removing some of the advantages held by dominant players.

Apple will be impacted by the DMA in three ways if it is implemented according to the European Union’s intentions:

  1. Developers must be allowed to use third-party payment platforms.
  2. Users should have the freedom to install apps without relying solely on Apple’s App Store.
  3. iMessage will be required to interface with other messaging platforms.

However, there are a few caveats to consider, as I’ll discuss shortly.

Initially, there was some uncertainty regarding whether Apple would fall under the DMA’s jurisdiction. Some politicians wanted the legislation to focus solely on social networks like Facebook and Twitter, while others wanted it to cover all major tech companies. Ultimately, the broader definition prevailed, bringing Apple into the regulatory scope.

Interestingly, the European Union required companies to confirm their qualification as gatekeepers. Apple has now complied with this requirement, as confirmed by reports from Reuters. Other tech giants, including Alphabet’s Google, Amazon, Meta Platforms, and Microsoft, have also notified the European Commission of their gatekeeper status.

Apple will have to allow developers to choose third-party payment platforms for app sales through the App Store. This requirement aligns with the ruling in the Apple vs. Epic Games lawsuit in the United States, although Apple is currently appealing the decision to the US Supreme Court.

On the other hand, the implications of the DMA on the App Store and iMessage are likely to unfold over several years.

Why is there uncertainty surrounding apps? The intention behind the law is to compel companies like Apple to provide users with the freedom to choose how they install apps. The idea is to allow iPhone owners to decide whether or not they want to use Apple’s official App Store, enable developers to sell apps directly to customers, and permit the creation of third-party app stores that consumers can opt for instead of Apple’s platform.

However, the wording of the DMA contains a potential loophole that Apple is likely to exploit and challenge in court. The clause states that gatekeepers can implement necessary technical or contractual measures to protect the integrity of their hardware or operating systems, as long as they demonstrate that such measures are necessary and justified, and there are no less restrictive means available to ensure security and prevent unauthorized access.

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Apple could argue that forcing users and developers to utilize the App Store is the most realistic way to protect them from malware and scam apps, for instance.

Regarding iMessage interoperability, the DMA mandates that Apple and other affected companies must enable message exchange between different messaging platforms. The objective is not solely to benefit tech giants like Meta, the owner of WhatsApp, but to allow startup messaging companies to overcome the challenge of low adoption rates. Users are often reluctant to install a messaging app until a significant number of people are already using it.

However, the DMA’s wording on this issue is vague. It stipulates that companies like Apple must share technical specifications for achieving interoperability, and the EU will then determine if the provided details comply with the law.

There is also a security-related exception in this regard, emphasizing that interoperability should not compromise high levels of security and data protection.

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