This article was originally published on LinkedIn. Robert Wildner, CEO of AVOW, reflects on the EU’s Digital Markets Act (DMA) as it marks a year of reshaping the tech landscape. While fall often brings nostalgia, this season has been anything but quiet for the industry, with Apple and Google facing significant challenges. In this article, Robert recaps the latest developments and discusses how the DMA continues to drive meaningful change.
The onset of Fall is usually a time for nostalgia. I call it “back to school syndrome,” that feeling you get as September rolls around, the days get shorter, the temperature gets colder, and the trees turn brown. It’s a time for reflection; for drawing the curtains earlier and for contemplating the fruits of the year so far. Right?
Not always. In my business, things often shift up a gear. Just over a year ago, for instance, the EU launched the Digital Markets Acts (DMA), legislation aimed at ending the sector’s monopolistic business practices. And what a year it’s been, with August being a prime example of how the DMA has been trying to level the playing field. From Apple and Google fighting the tide on the new status quo, to some compelling criticism of the policy from industry leaders, it’s been a challenging month for the policy. So let’s recap what’s been going on.
Apple Suffers DMA-Overload
Since I began writing these blogs, Apple has barely been out of DMA-related news. August, however, was a huge month for the Silicon Valley giant, with the biggest headline being that it will allow third parties to opt out of its Core Technology Fee (CFT). Introduced after the DMA went live in March, the CFT requires these developers to pay 50 cents (EU) for every fresh install per year over 1 million for apps outside the App Store. Now, following a warning from the EU, Tim Cook’s company is saying that developers can ignore the CFT… as long as they pay a different set of fees. The audacity is almost comical
Next up: Fortnite is finally back on the App Store. Yep, you read that correctly. I’ve mentioned this possibility several times in these updates, but on August 16 it actually happened, four years since the game was suspended for featuring in-app purchases. What’s more, two days before, AltStore Pal, an alternative app store popular with gamers that launched on iOS in April—thanks to the DMA—announced that it had received a grant from Fortnite developer, Epic, covering its CFT costs. In turn, this means it’s now free to use on iPhones. And so, as a result of the EU’s interventions, iOS is fast becoming a popular destination for mobile gamers, not least because of the influx of other gaming-friendly alternative app stores such as Aptoide.
Last but not least, following pressure from the EU to make iOS conform to the DMA’s rules enabling customers to choose which apps they want on their device, Apple has made further tweaks to its mobile operating system. These include greater freedom to select default apps, the ability to delete preloaded apps like the App Store and Camera, and a clearer browser-choice screen. So, while these victories might sound slight, given the lengths we’ve seen Apple go to in terms of DMA compliance, each one is a triumph.
Google’s Dreams of Global Dominance Shatter
On the world stage, the most interesting story was that the US Justice Department won its anti-steering case against Google. The judge ruled that the behemoth’s billion-dollar contracts with Apple and Samsung, allowing it to be the default search engine on each respective operating system, broke antitrust laws. Despite this, the ruling didn’t stipulate any penalties, which are to be determined in a subsequent trial. Nevertheless, it’s a major blow for Google’s dominance at a time when it is facing a DMA noncompliance investigation in the EU, as well as another investigation in the UK under the country’s recently introduced DMA-style laws.
The pressure on Google is mounting. As the Spanish newspaper El Pais observed, the company is now under fire on all sides of the Atlantic. As such, this should silence critics who think the DMA is somehow anti-American. On the contrary, Washington and Brussels are now in agreement Google’s grip on the market must end. Consequently, when the judge in Google’s case in the US makes their recommendations for appropriate penalties, they should look to Europe.
Is the DMA Too Harsh?
Lastly, there’s been a lot of talk online this month about how tough the DMA has been. Reflecting on the 12 months since the DMA was soft-launched, France 24 has called 2024 “an annus horribilis for big tech,” and for others the picture looks even bleaker. According to Daniel Friedlaender at the Disruptive Competition Project, the DMA’s effect on Apple and Google has been “stifling.” “Europe must create an empowering environment over the next five years, where regulation is not seen as the only solution or used as an instrument of punishment, but as part of a broader strategy for progress instead,” he argues.
Conversely, Wolfgang Kreutz at Heise suggests, commenting on Apple and Meta’s decision to withhold certain AI features in the EU, that the DMA has been doing a good job. “This tactic of instrumentalizing EU citizens as a means of exerting pressure against regulations must not be allowed to work under any circumstances,” he writes. “The long-term benefits of a fair digital market far outweigh the personal restrictions. Then I’ll just get some features later.”
Naturally, I’m more sympathetic to Kreutz’s view, but Friedlaender has a point. While there has been some feel-good news this month, including the launch of Epic’s own app store, a lot of reporting on the DMA has focussed on one thing enforcement. And while it’s great that the EU is taking this issue seriously, business leaders undoubtedly need to be shown the DMA’s benefits via positive news stories too. Indeed, as the DMA’s godmother Margrethe Vestager steps down, the PR battle is something her successor should get to grips with from day one.
And once again, that’s all from me!
—Robert
This article was originally published on LinkedIn.
Read Robert’s series of DMA articles