The European Union has come down hard on Apple over breaches of its Digital Markets Act (DMA). The DMA has, since it came into effect a couple of years ago forced Apple to make many changes from mandating the use of USB-C through to allowing users in the EU to side load apps on their iOS devices and the ability to establish alternatives to Apple’s App Store.
The DMA has a broad scope and impacts almost every major tech company on the planet. Apple has been fined, in this instance, for the following according to the European Commission (EC):
Under the DMA, app developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.
The Commission found that Apple fails to comply with this obligation. ….
As part of today’s decision, the Commission has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect.
Going back to look forward
Way back in the 1990s, there were two main platforms for mobile devices: Palm and Windows Mobile (which was originally Windows CE and then Pocket PC). In those days, users could go to developer websites, download apps and manually install them. There was plenty of competition between developers but it was not great for users. They had choice but it was also a bit of a mess.
Installers didn’t behave the same way, removing apps could be painful and there was no vetting of apps to ensure they weren’t malicious or collecting data without permission.
[Editor’s note – Psion was also a popular platform at the time but it was quickly usurped on the market as Palm and Microsoft moved in]
The App Store was a game changer
When the first iPhone was released, there was no App Store. It was a groundbreaking device in many ways but you could only use the apps Apple pre-loaded on the device. It was 13 months after the first iPhone was released when the App Store launched with its first 500 apps.
The revolution here was that there was a simple way to install apps that had been checked to ensure they didn’t compromise device performance or security. That has not been perfectly achieved but loading an app on an iPhone (or any of the other Apple platforms supported by an App Store) is far safer and easier today that it was back in the old days.
Is there competition?
This is the big question. The DMA is often seen as a competition-based regulation but I’m seeing it as a control-based regulation. In effect, the EU regulators are saying that Apple’s control of the iOS ecosystem is too strong and diminishes user choice.
As an aside, it’s interesting that the same EU also mandated the use of USB-C connectors for charging electronic devices which effectively stifles the development of a better connector type. Again, this is exerting control.
Here’s the thing. As I see it, there is significant competition in the smartphone market and users have lots of choice. Broadly, there’s Apple and Alphabet. Apple created and distributes iOS exclusively while Alphabet created Android and provides both open source and commercial versions through licensing agreements.
The Android ecosystem is serviced by different app stores including Google Play but there are several others as well. And it’s possible to side-load apps – install them directly to a device without using an app store.
The problem for Apple is that it has captured about 28% of the global smartphone market. And it wants to control as much of the user experience for its customers as it possibly can. But the converse is that almost three-quarters of the global smartphone market has chosen to not use an iPhone and can access multiple app stores and side-load apps.
It’s hard to argue that users don’t have choice. But the EC says Apple, while allowing side-loading and alternative app stores (like the one that was used for distributing porn), has made the process too complex and requires them to pay a fee.
Where do we go from here?
In a statement to Reuters, Apple responded to the EU’s judgement saying”
Today’s announcements are yet another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free.
Apple is preparing to challenge the fine that was meted out (Meta copped a €200M fine as well).
For users in Australia, this probably doesn’t have any immediate impact. But regulators here will be watching closely to see how things unfold. Local regulators have shown their willingness to take on big tech companies through the age restrictions being placed on access to social media and forcing social media companies to pay traditional media for access to news articles.
It doesn’t seem likely that Australia will follow the EU at this stage. The geopolitical situation at the moment means our government is unlikely to want to do anything that further antagonises an increasingly erratic US government. But if the EU gets its way and forces Apple to completely open its platform, we could see our government emboldened to follow suit.
Is the EU right?
The EU is free to make its own laws and rules and require anyone operating inside the EU to comply or face sanctions. But is this application of the DMA right?
I started this article looking back at the early days of mobile devices. I owned a number of Palm and Pocket PC devices (I still have one in the box in my cupboard) and remember the [sarcasm]joy[/sarcasm] of either downloading an app and then going through a complex installation procedure that sometimes failed. I had all the choice in the world but it came at a cost.
Apple created a new way for mobile devices to be used and managed. And that method was emulated by others, albeit without Apple’s tight control over the user experience.
It’s hard to argue that users don’t have choice today. They can choose Apple’s walled garden or they can choose the openness of Android.
While the EU might have the law on its side (after all, it made the laws), I’m not convinced it is doing what’s best for its citizens.
Anthony is the founder of Australian Apple News. He is a long-time Apple user and former editor of Australian Macworld. He has contributed to many technology magazines and newspapers as well as appearing regularly on radio and occasionally on TV.