Wind of change: Apple recognizes the inevitability of third-party app stores in Europe

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In 2022, the European Union introduced the Digital Markets Act (DMA), which came into application across the countries in the EU a year later this May. Apple and other big tech companies, seen as gatekeepers, have probably known for a while, maybe even years, that they would have to follow the new competition rules. Recently, European officials once again urged Apple to open its ecosystem to competitors, and now it looks like it might finally have to do it.

 
TechCrunch reports that Apple seems to have acknowledged the inevitable and stated that it “expects to make” changes to its App Store policies to align with the DMA. The adjustment in language appears in the updated risk factors section of Apple’s fiscal year 2023 Form 10-K filing. This alteration signifies a departure from the company’s previous stance, conveying a more definite commitment to potential modifications in App Store policies.

Apple has stated that forthcoming changes could impact how it charges developers for platform access, the management of app distribution beyond the App Store, and the extent to which it allows developers to communicate with consumers regarding alternative purchasing mechanisms within the App Store.

The DMA’s primary objective is to shift competition enforcement against tech giants by imposing specific obligations on designated gatekeepers, like Apple, Google, and Meta, from the outset. These obligations include not hindering business users from promoting their own offers to end users and prohibiting the prevention of third-party app store installations.

In a client report, analysts from Morgan Stanley investment banking company expressed their belief that Apple’s altered language confirms the imminent arrival of App Store changes. They anticipate that Apple will likely introduce third-party app stores on devices in Europe, positioning the company well to compete due to the “App Store’s security, centralization, and convenience.”

The deadline for gatekeepers to comply with the DMA is March 7, 2024, with penalties for infringements reaching up to 10% of global annual turnover—potentially more for repeated offenses. The tech industry braces itself for significant transformations as the DMA reshapes the landscape for major players in the EU.

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