Mobile apps have been updated this week to quickly align with the new Digital Markets Act that takes effect this Thursday, March 7. For example, Apple has released a new version of iPhone’s operating system, iOS 17.4. Yet every app or diverse software must roll out fresh versions that fit the regulatory change. The Consumer Organization reminded everyone that to enjoy the benefits of the new rule, users should update their operating system and/or apps on their mobile devices or other devices they use to connect.
The new Digital Markets Act (DMA) will subject six tech giants – Apple, Alphabet (Google), Amazon, ByteDance (TikTok), Meta (Facebook and Instagram), and Microsoft – to a strict set of rules about how they operate in the European space, starting this week. These firms are labeled ‘gatekeepers’ and will face special rules under the DMA. The reform will require gatekeepers to allow third parties to interact with their services in specific situations; enable user companies to access data generated when using the gatekeeper’s platform; provide advertisers and publishers with the tools and information needed for independent verification of ads hosted by the gatekeeper; and allow user companies to promote their offers and contract with customers outside the gatekeeper’s platform.
According to the European Commission, the reform aims to prevent these large players from holding dominant positions that stifle innovation by smaller firms in the internet sector. “Gatekeepers will keep opportunities to innovate and offer new services. The key change is that they may no longer engage in unfair practices to gain advantages for themselves at the expense of other firms and users,” the commission explained.
Unbiased search results
Users stand to gain from a more transparent market view after searching on those tech platforms. For instance, when performing a search on Google or any other search service, results should present opportunities or offerings more fairly, because managers cannot favor their own products or services in search rankings.
No mandatory sign-ins
Another practical example is the possibility to sign into an online service without being forced to sign into another service from the same company. The law also gives app providers the right to inform consumers directly within apps about discounts and different types of subscriptions.
More search engines
It is also noteworthy that there will be a greater variety of search engines and browsers available, allowing users to choose their preferred options and switch easily if desired.
Uninstall preinstalled apps
Another interesting effect of the law is giving consumers the right to uninstall apps that come preinstalled on a phone but are unwanted or unused.
Multimillion-euro penalties
The EU competition chief Margrethe Vestager told AFP that Europe will ensure tech giants do not undermine the spirit of the legal framework, with penalties for non-compliance. A recent €1.8 billion fine against Apple for restricting information about cheaper music streaming alternatives illustrates what could come next. “This isn’t about penalties or breaking up companies. It’s about pushing compliance with the law,” Vestager said to AFP.
App stores under scrutiny
Mobile app stores reflect the impact of the legal shift. Program updates will be widespread this week. Apple has indicated that customers will be able to download apps from rival companies, though some developers find the changes challenging to implement in practice. ByteDance and Meta have also raised concerns in European courts, but the reform takes effect this Thursday.
Exclusive technologies
The EU also aims to prevent business deals from stifling competition and market growth. In February, Microsoft announced a 15 million euro partnership with French firm Mistral AI, a move Brussels will review as part of a broader probe into deals between major market players and AI developers. Microsoft has invested billions in OpenAI, the creator of ChatGPT, and Brussels is examining whether the Mistral AI agreement is a hidden merger.
Apple’s app relationships
Apple’s changes to its app market include charging 50 euro cents per installation once an app reaches one million annual downloads. Previously, Apple charged a 30% commission on subscription plans offered to users via the App Store. This week, the company faced a €1.95 billion fine from the European Commission for imposing App Store restrictions on competing music streaming services.
Another iOS 17.4 update allows external developers to use the iPhone’s NFC payment chip for contactless payments outside Apple Pay and Apple Wallet within the European Economic Area.