The dawn of a new landscape for Big Tech has emerged. From March 6th, major online platforms are required to abide by Europe’s Digital Markets Act (DMA), along with its associated responsibilities, or endure the repercussions.
The European Commission has held Big Tech under close inspection for quite a while. Ranging from antitrust probes to restrictions on data collection and use, Europe’s regulators have progressively reduced the expansive influence that has characterised Big Tech.
Yet, in recent years, the intensity of these actions has increased. In 2020, President of the European Commission, Ursula von der Leyen pledged to alter the regulations for Europe’s digital market, primarily through the launch of the Digital Services Acts (DSA), and subsequently, the Digital Markets Act.
So, what comprises the DMA?
At times, the impact of the two laws could overlap, yet they possess unique objectives. The DSA governs service provision with a focus on safety, whereas the DMA has been designed to promote competitiveness in the digital ecosystem, facilitating a balanced environment for businesses of varying size.
The DMA, which was officially enacted last year, is now being implemented in the real world. Focused primarily on tech behemoths, the law prescribes the conduct for companies owning large platforms and possessing an extended reach.
What initiated its current implementation?
The formulation of this legislation has been a lengthy process. The conception of the act took place in 2020 by the European Commission, and it was over a year before a political consensus was achieved. In November 2022, the implementation of DMA began, and it started being applicable from May of the subsequent year.
The EU then identified a list of 22 services, which it deemed as “gatekeepers” from six companies, including Apple, Bytedance, Google, Microsoft, Meta and Amazon, thus making them subject to these rules. These services included players like Google Search, Amazon’s Marketplace, Facebook and iOS.
Subsequently, the countdown started, giving six months to each of the 22 services to align themselves with the laws and restrictions outlined in the act.
The stipulations of the DMA include granting access to external entities to utilise their services under certain conditions, allowing them to access data produced as an outcome and enabling users to engage with their clientele beyond the platform.
Gatekeepers are prohibited from favouring their own products and services over similar ones offered by third parties on their platform. They are also not allowed to follow users outside the central platform service for ad-target advertising without obtaining permission.
[EU prepares big tech for the implementation of Digital Services Act]
Essentially, numerous practices that have aided the growth of companies may now contradict the newly implemented regulations.
Who will this influence?
According to the Digital Market Act (DMA), the European Commission can identify a digital platform as a gatekeeper if it offers a core platform service that serves as a key gateway between businesses and consumers.
However, the platforms must satisfy certain qualifications: they must achieve a fixed amount of yearly turnover within the European Economic Area and offer a core platform service in a minimum of three EU member states. Furthermore, they should offer a core platform service to a minimum of 45 million monthly active consumers and over 10,000 annually active business users within the EU.
The DMA is designed to focus on larger companies rather than smaller, emerging companies that could be hindered by these regulations.
A myriad of tech corporations identified as gatekeepers by the DMA will face changes but the most immediate and apparent changes will probably be seen with a specific company: Apple.
Historically, Apple has maintained a strict regime with the iPhone, providing a closed system wherein developers desiring to offer their software to iPhone users must utilise the App Store.
Under the DMA regulations, Apple is required to make its ecosystem accessible to others, allowing alternative app stores to cater to its clientele.
The App Store was initially a concession to users. When the iPhone was debuted in 2007 by Apple, only Apple’s own software was authorized to operate on it. The idea was, opening it up, as per erstwhile CEO Steve Jobs, could potentially expose it to security risks or, in the words of author Walter Isaacson’s biography of the Apple co-founder, “contaminate its integrity.”
To work around that, an approval process for the App Store was initiated where software had to comply with specific rules, and go through inspection by a human evaluator, ensuring it performed as promised and did not provide unauthorized access.
The DMA’s new regulations mean Apple must make its ecosystem more inclusive, thus enabling a variety of other app stores to compete for customer attention and make it easier for consumers to recompense developers directly. This could potentially offer users a wider range of software options and innovative methods of in-app payments, ones that were previously unavailable.
For those who utilise an iPhone, this shift is sure to bring about some intriguing prospects. What will this look like in practice? Users throughout the EU will gain the capacity to sideload apps once the iOS 17.4 software update is rolled out. The next step is the emergence of new app stores, which can be downloaded directly from the developer’s site to an iPhone. Apple is reportedly in dialogue with numerous developers. Additionally, Epic Games, the gaming corporation, is intent on launching an app store specifically tailored for iOS.
This is only the beginning. Expect the arrival of myriads of alternate app stores in the not-too-distant future. But what’s the downside? Developers will still encounter some hurdles before they’re given full access to the clientele of iPhone users. Also, alongside the boon of increased flexibility regarding phone usage, customers now have to meticulously consider their security.
While fostering more competition by liberalising such systems might be appealing, it could also inadvertently expose your device to potential threats. Apple emphasized its stance on the DMA mandates in a statement on its support page.
The DMA changes could pose heightened risks to both users and developers. This includes newly established pathways for malware, frauds, scams, harmful or illegal content, as well as other privacy and security threats,” the statement reads. It added that these alterations could impede Apple’s proactive actions concerning malicious app prevention and provision of support to users encountering app-related issues from non-App Store downloads.
Nevertheless, Apple has implemented certain measures, including notarisation for iOS apps, an automated scanner to detect potential threats in a bid to prevent harmful malware from infiltrating its devices.
The upcoming system will not be as rigid as the existing method that necessitates an assessment of each app before it can be made available on the App Store. In 2022, Apple put an end to over 400,000 developer accounts under fraudulent activities, halting the establishment of an additional 100,000.
The scrutinising procedure, albeit not foolproof, aids in recognising potential security issues. Whether notarisation will generate the same outcome remains doubtful, however, it will screen and eliminate some of the most egregious violators. Apple had previously put the procedure to the test with Mac and its app store, therefore it is not unfamiliar terrain.
The firm has also implemented additional precautions, including marketplace developers’ authorisation and disclosures regarding alternative payment methods. However, even with these safeguards, many dangers still persist, states Apple.
Concerns pertaining to payments, reimbursements, or subscription discontinuations should be directed to the developer or app marketplace, not Apple. Whilst Apple will continue to monitor all apps installed on its devices to verify their authenticity and ensure they are not infected with malware, there are other factors to consider, especially the effect of these changes on parental controls that so many families depend on.
The advantageous insight is that some of these parental controls, such as Screen Time, which restricts the duration of app use, will still function, regardless of the app’s origin. Nonetheless, this does not apply universally, particularly in relation to in-app purchases. In the past, purchases made within an app or for an app on your iPhone, would be processed through Apple’s systems. If there were problems with a payment, or a refund was required, you would contact Apple.
However, for sideloaded apps that do not use the App Store’s payment system, Apple is cautioning users that restrictions on in-app purchases and Shared Family Purchases available through Screen Time, universal purchase and Ask to Buy, will not be supported.
So, consumers must be cautious of their purchases – and it’s time for everyone else to start bolstering their knowledge of mobile security.
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