Winter Wonder: A Festive DMA Roundup
Well, it finally happened. The end of the year is upon us. And with the holidays approaching, early December is a challenging time in any sector. As the finish line comes into view while the pressure of deadlines, responsibilities and social engagements mount, it’s frequently hard to stay on top. And in the app economy the strain can be huge, as the industry barely ever stops. So if you’ve been struggling to keep up with what’s going on in the business, let me lighten the load. Alongside my usual rundown of the latest news surrounding the EU’s flagship digital antitrust legislation, the Digital Markets Act (DMA), I’ll also be casting an eye back over how the policy has fared this year. So let’s get into it.
The Final Countdown: Big Tech Ends the Year On a Low
November wasn’t kind to Silicon Valley. Take Apple for example. Since being warned by the EU in June for DMA-noncompliance, the iPhone manufacturer now looks set to become the first company to be fined under the legislation. And with a maximum levy of 10% of its global revenue, it’s a penalty that’s hard to ignore.
And then there’s Google. On the one hand, it’s begun a trial in Belgium, Estonia, and Germany where search hotel-related search results will be displayed in a “straightforward” manner without any preferencing—especially to its own holiday-oriented service. On the other hand, rival search engine DuckDuckGo has demanded that the EU widen its probe into Google’s alleged DMA-noncompliance, citing several complaints. What a way to end the year.
Elsewhere, both Amazon and Meta are facing the heat as well. In the case of the former, Reuters is reporting that the EU appears poised to investigate Amazon for allegedly self-preferencing its own products and services. And in terms of the latter, Meta looks like it has finally given up on its “pay or consent” model that it enacted in response to the DMA, in which Facebook and Instagram users either had to agree to receiving personalized ads or a pay a fee. All of which is just goes to show that DMA is achieving exactly what it set out to.
The DMA in 2024: A Feast for Developers
The flipside to the EU penalizing companies for monopolistic practices is that it helps smaller businesses grow. Since the DMA launched, however, there hasn’t been positive spin on this topic. So as we begin our round-up of the DMA’s 2024, let’s start with some.
Indeed, the main headline of the last nine months is that some companies outside Silicon Valley have been thriving. In April, I noted that, following Apple conceding to the DMA’s demands to allow users to choose their default browser, Opera reported a 168 percent increase in iOS downloads, while Aloha enjoyed a 250 percent surge on both Android and iOS. Elsewhere, Ecosia, Brave, and DuckDuckGo also reported undisclosed growth in this area.
Meanwhile in June, I reposted news that four new gaming-centric alternative app stores had launched on Apple’s App Store: AltStore Pal, SetApp Mobile, Mobivention, and Aptoide. Like Altstore and SetApp, Aptoide has attempted to lessen Apple’s developer fees by transferring the cost (50 cents EUR per-installation of its app store) to developers charging for in-app purchases—an innovative scheme and a significant improvement for developers.
What’s more, I also noted in June that, according to a report by the investment bank Evercore, Apple’s EU App Store revenue in fact increased around the time of the DMA’s launch. So don’t believe the haters. Far from damaging the app economy, the DMA is allowing it to flourish.
Gaming Levels Up
It’s also been a good period for gaming apps. As regular readers will know, I’ve been closely following Fortnite developer Epic’s well-publicized battles with Google and Apple. This time last year, Epic’s US case against the former wrapped up in its favor. And as I reported in August, here in Europe, Fortnite finally returned to the App Store too.
Back in July, Microsoft also announced that it was due to launch its own mobile gaming store. Although it is currently facing delays in going live, The Verge originally reported that Bill Gates’s company had been creating this store in anticipation of the DMA. And as I suggest at the time, the logic behind this move was obvious. With Android and iOS being forced to welcome gaming titles thanks to the DMA, the likes of Microsoft needed to act or risk missing out. Watch this space for similar developments next year.
Apple and Google Flounder
Of course, the biggest DMA-related headlines in 2024 concerned Apple and Google. A lot of the time, the news felt like groundhog day: for every step forward, two seemed to go back. Nevertheless, progress has been made. So let’s recap.
As I noted above, in June the European Commission (EC) ruled that Apple breached the DMA by preventing “app developers from freely steering consumers to alternative channels for offers and content.” The company was then given 12 months to put things right. But instead of listening, Apple went on the offensive. That month, it also announced that it was withholding its new AI-powered iPhone tech over concerns about the DMA. Reading the writing on the wall, Meta followed suit too, withholding its generative AI tools in the EU until further notice.
While this was going on, Google’s fortunes took a turn for the worse on both sides of the pond. In August, the US Justice Department won its anti-steering case against Google. And in October, the judge in the case suggested the company may well need to be broken up in the US as well. All this while the company is not only being investigated in the EU for DMA-noncompliance, but is also facing scrutiny in the UK for similar reasons.
Overall, then, the broad picture in 2024 was clear: the DMA is shaking up Big Tech’s monopoly. Right now, however, the most intriguing question is: How will this progress be affected by the incoming Trump administration, when Elon Musk, the head of its cost-cutting team, has been a big critic of the EU? Politico recently painted a stark portrait, and what seems certain is that 2025 is going to be the DMA’s greatest test yet.
And that’s all from me! Thank you for reading these updates this year. I look forward to welcoming you back in January.
Yours,
—Robert.