This week saw the implementation of the Digital Markets Act in Europe, which imposed stringent new regulations on the largest Internet corporations. The entire globe is currently watching to see which giant breaks the law first. Apple is a strong contender for the initial formal probe, according to one of the DMA's architects, who calls the corporation "low-hanging fruit."
Due to the limitations Apple imposes on software developers who depend on its software Store to reach millions of users, the company has come under increasing criticism in recent years from rivals, authorities, and courts in both Europe and the US. Epic Games, the publisher of Fortnite, had its developer account terminated by Apple yesterday. Epic Games has filed a lawsuit against the firm in US courts and recently declared its plan to open a competing app store to the Apple App Store.
That means Apple is probably going to be the first company to break the DMA, according to German MEP Andreas Schwab, who spearheaded the negotiations on behalf of the EU Parliament. He tells WIRED, "[This] gives me a very clear expectation that they want to be the first." "Apple's approach is a little strange overall, so the fruit is low on the tree."
Schwab is not a part of the DMA's enforcement. The European Commission is in charge of that; it has already asked for "further explanation" as to why Apple closed Epic's account and is investigating whether or not this breaches the DMA.
In a statement provided to WIRED by Apple spokesperson Rob Saunders, the company states that "Apple's approach to the Digital Markets Act was guided by two simple goals: complying with the law and reducing the inevitable, increased risks the DMA creates for our EU users." Apple has said on its website that there is a chance of malware, illegal code, and other hazardous content while using rival app stores.
Apple must permit iPhone users to download software from sources other than Apple's official App Store in order to comply with the DMA's regulations, which are designed to "break open" tech platforms. The first alternative app store to utilize the new method would have been the Epic Games Store, which was announced in January and was planned to be released by the company that makes Fortnite, Epic.
Apple told WIRED that a 2021 California court decision gave them the authority to close Epic's accounts. Although the US Supreme Court rejected a request to hear the most recent development in a protracted antitrust lawsuit between the two companies in January, a victory for the smartphone manufacturer, Epic CEO Tim Sweeney has long been a vociferous critic of what he terms Apple's "app store monopoly."
On March 7, at midnight in Brussels and 3 pm in Silicon Valley, the DMA came into effect. From that point on, a set of new regulations aimed at enhancing competition in digital marketplaces had to be complied with by six of the largest tech companies in the world: Apple, Alphabet, Meta, Amazon, Microsoft, and ByteDance, the Beijing-based owner of TikTok.
Apart from Apple's requirement to permit third-party applications, Microsoft Windows will no longer come pre-installed with Microsoft-owned Bing as its default search engine; users of Meta's WhatsApp will have the ability to communicate with others on competing messaging services; and Google and Amazon will need to modify their search results to make more space for competitors. Businesses who violate the new regulations risk fines equal to up to 20% of their worldwide sales.
According to center-right European Parliamentarian Schwab, the new regulations should bring about a "change for the better" on the European internet. The objective is to "allow more openness, more fairness, and most of all, more innovation and, consequently, new services."
Schwab's remarks join the growing chorus of disapproval directed at Apple. Margrethe Vestager, the head of the EU's antitrust agency, stated to Bloomberg earlier this week that the DMA's initial priority will be on organizing Big Tech's app stores. She stated on Tuesday, "I think it's important that you can have multiple app stores on your phone."
The mood in the commission's hallways had grown more urgent after Apple removed Epic. The EU's industry chief, Thierry Breton, remarked on X on Thursday that "under the #DMA, there is no room for threats by gatekeepers to silence developers." Breton was presumably alluding to claims made by Epic's Sweeney that Apple had blocked the company's account due to the CEO's critical posts on X. "As a matter of urgency, I have requested that our services investigate Apple's termination of Epic's developer account."
According to Schwab, demonstrating the DMA's authority on Apple's App Store would promote how the legislation may enhance people's internet experiences in general. He says, "I think an excellent way to illustrate what we hope to accomplish with the DMA would be to look at the App Store." "All they'll see is more apps, and these apps will appeal to them."
One of the main goals of the DMA is to provide consumers control over where they download mobile apps by forcing Apple and Google to allow third-party app stores on devices. According to Schwab, there will be more opportunities for innovation for app developers as well as more options for customers, which will boost competitiveness. "We can reach a wider audience in markets by using alternative app stores."