The European Commission (EC) announced on Monday that it will investigate several gatekeepers over the way they’ve chosen to comply with the Digital Markets Act (DMA). To the surprise of basically nobody who has been following Apple’s methods of introducing iPhone sideloading support in the EU, Apple is part of that investigation.
I explained in detail how iPhone sideloading would work in Europe when Apple announced its DMA compliance changes. At the time, I warned that the EC might not like Apple’s methods. One possible reason for an investigation was the CTF fee that Apple would charge developers of popular apps who make their software available on their websites or third-party stores.
It turns out the EC will indeed look at the fee structure Apple has proposed. But that’s not the only point of contention the EC has with Apple on the latter’s DMA compliance.
I’m a European who doesn’t plan to use sideloading, install iPhone app marketplaces, or use third-party payment systems for digital content in the App Store.
But I understand that some developers want better terms than what Apple has been offering. And some consumers might want to download any app on the iPhone, just like they do on a PC.
That’s why I think Apple should make iPhone sideloading available more broadly without worrying that much about taking a financial hit. I’m sure most people will stick with the App Store if given the choice.
As for the iPhone’s security, Apple could very well stick as many pop-up screens on the iPhone to inform the user about the dangers ahead and point the fingers at the legislators, starting with the EC.
I did say that Apple’s DMA changes no longer make me worry about iPhone malware, though Apple made updates to its original set of rules to allow developers to offer their apps for download from their websites. This somewhat increases the theoretical risk of installing malicious apps on the iPhone.
I also think that the already-infamous CTF tax, €0.50 per app install after the first million downloads, is something that Apple has to implement, even if it might have to lower the fee. It boggles my mind that some companies, like Epic and Spotify, would expect access to the entire iPhone ecosystem while paying as little as possible.
But Apple has started off on the wrong foot in Europe. It got plenty of pushback after its initial DMA compliance documentation was published. Plenty of people voiced their concerns, including some of its most notable rivals.
Then, the whole Epic developer account approval-ban-and-reapproval mess further hurt Apple. That was the EC winning its first DMA battle against the iPhone maker.
The EC investigation
The EC’s announcement on Thursday focuses on various DMA compliance decisions Apple made, not just fees. The CTF isn’t even mentioned by name.
First, the EC mentioned Alphabet’s and Apple’s steering rules:
The Commission has opened proceedings to assess whether the measures implemented by Alphabet and Apple in relation to their obligations pertaining to app stores are in breach of the DMA. Article 5(4) of the DMA requires gatekeepers to allow app developers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge.
The Commission is concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations. These constrain, among other things, developers’ ability to freely communicate and promote offers and directly conclude contracts, including by imposing various charges.
The second matter concerns the screen choice for the default browser on iPhone:
The Commission has opened proceedings against Apple regarding their measures to comply with obligations to (i) enable end users to easily uninstall any software applications on iOS, (ii) easily change default settings on iOS and (iii) prompt users with choice screens which must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.
The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, may be preventing users from truly exercising their choice of services within the Apple ecosystem, in contravention of Article 6(3) of the DMA.
Only then comes the DMA fee changes that Apple has proposed:
Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under Article 6(4) of the DMA.
The announcement covers DMA investigations into Amazon, Google (Alphabet) and Meta, which are also gatekeepers in the region.
What comes next
The investigation will take up to 12 months to complete. After that, the EC will inform the companies of its findings and detail the measures a gatekeeper should take to address any concerns. The Commission can then impose fines of up to 10% of a company’s total worldwide turnover in case of infringements. Fines can then go up to 20% for repeated violations. After that, the EC might take addditional measures against gatekeepers still failing to comply.
As I said before, any EC investigation will take time. And time is on Apple’s side.
