“There is nothing permanent except change,” observed the ancient Greek philosopher Heraclitus—too true. Yet for the past few years the tech industry has frozen under the influence of a handful of figures. In the app economy, Apple and Google have effectively been running closed shops, charging developers high fees, limiting consumer choice, and ostracizing companies that disagreed with their terms.
This year in Europe things changed. Two months ago, the European Union introduced the Digital Markets Act (DMA). Calling time on Apple and Google’s grip of the market, the policy means that alternative app stores are now available on Android and iOS, and that people purchasing new smartphones get to choose which apps are already installed on their device. So how are things going? Pretty good. Consumers are using their new freedoms and the EU seems determined to make things work. Is everything perfect? Of course not. So with spring in the air, let’s examine the regulation’s progress in April.
DMA in Action: EU-Friendly Updates and Small Browsers Boom
One obvious indication of the Digital Market Act’s success has been its uptake in app updates. With the public beta release of iOS 17.5, iPhone users will be able to access alternative app stores. And with the latest WhatsApp update launch, those sending messages on the platforms will be able to avail themselves of “interoperability” with other third party messaging services like Sunbird, an app that allows Android users to connect to iMessage. Almost overnight, a world of new possibilities is opening up.
But it doesn’t stop there. As I noted in my March update, following the EU’s decision to allow new smartphone users to choose which apps come preloaded on their device, the browser Opera reported a 168 percent increase in iOS downloads. Well, the uptick for small browsers is continuing. As Reuters noted, the Cyprus-based browser Aloha enjoyed a 250 percent surge on both Android and iOS in the same period, while Ecosia, Brave, and DuckDuckGo also reported undisclosed growth in this area. And all this despite the iPhone’s new browser-choice screen, which is apparently so difficult to navigate that the EU is investigating it.
What’s more, Apple is now allowing third-party games emulators on iOS too. So while these might sound like small victories, the broader picture is clear. The DMA is working—and consumers are seizing the opportunities it brings.
DMA Noncompliance – the Saga Continues…
Of course, life isn’t a bed of roses. The EU knows this too, so while the bloc recently announced that it intends to apply the DMA’s rules to the iPad as well, there are still other issues.
Take, for instance, the standoff between Apple and Spotify. After the Digital Markets Act became law in March it seemed as if the music streaming giant could finally promote its subscription options on iPhones. Alas, things have not worked out. As per TechCrunch, the two are still clashing. While Apple has agreed to allow Spotify to use a specific link to its paid-for services in-app, it’s imposed a 27 percent fee for doing so. Unsurprisingly, Spotify didn’t include this link in its late-April update, so Apple rejected it. And all this after the EU already fined Apple 1.84 million EUR for stifling competition from rival music streaming services.
With the saga of Epic and Google still painfully fresh, the gaming industry is understandably anxious. “Only if properly enforced will the DMA lead to pro-competitive changes,” remarked the European Games Developer Federation recently. “[T]here is more to do,” concurred Czech MEP and European Parliament Vvice-Ppresident Dita Charanzová at Renew Europe’s recent Digital Day. To be sure, if the EU is serious as it seems to be about compliance then it is going to have to stand firm, not only to protect consumer freedom but to preserve the DMA’s standing too.
Digital Markets Act: Across the Pond… And Back Again
While I referred earlier to “broader pictures,” it’s easy to forget that the DMA is causing ripples outside of the EU as well. Just look at the UK and Japan, which are moving ahead with their own DMA-esque policies. At the same time, this butterfly effect is also fuelling skepticism.
Case in point is the reaction to the US Senate’s approval for legislation forcing TikTok owner ByteDance to either sell its flagship app or face a ban, which was launched in tandem with the EU announcing that it is considering making Byte Dance a DMA-gatekeeper. For Mark Jamison of the American Enterprise Institute, this transatlantic double whammy is having the perverse effect of stifling “competition and innovation.” Contending that the Digital Markets Act will effectively lead iOS to become more like Android, he argues that the EU law is predicated on “the myth” that “innovation is the exclusive domain of small entities, while large firms are cast as the antagonists of progress.”
Although I overall disagree, I can’t help but applaud Mark. As I’ve argued before, big companies like Apple and Google aren’t the enemy per se. On the contrary, ideally, you’d have even more tech brands achieving this scale. But as the EU and other countries are now recognizing, certain companies are preventing this by blocking their rivals. Moreover, as for iOS turning into Android—give me a break. A few more apps and some links to paid services aren’t going to fundamentally transform this impressive operating system.
And that’s a wrap for this month. I’ll be back in June with another roundup. But before I go, I thought I’d add one more story emphasizing the DMA’s global appeal. As covered in Dextero, non-EU iPhone users are so desperate to use third-party apps without sideloading that they’re “spoofing” their phones to make them believe they’re in Europe. And they say necessity is the mother of invention… Until next time!
If you’re interested in how these changes might affect your mobile app growth strategy, then book a free consultation with AVOW’s experts today! We can help you navigate the new regulations with mobile OEM advertising and ensure your app reaches the right audience.
Check out the previous articles in Robert Wildner’s and AVOW’s Digital Markets Act series:
From Control to Choice: The Digital Markets Act (DMA) and the Story So Far
Timeline of the Digital Markets Act (DMA): A Path Towards Tech Freedom and Consumer Choice