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EU Digital Markets Act could throw a wrench into the works of Apple

By Anton D. Nagy March 18, 2022, 1:45 am
apple app store logo Source: Pocketnow

According to a note to Evercore clients reportedly seen by ped30.com's Philip Elmer-DeWitt, the EU Digital Markets Act is getting closer to fruition.

The Act’s final wording and form could be agreed upon this month by the EU body, and a European Commission vote could happen within two-three months.

The bill is expected to pass easily, according to people familiar with the matter, and it might come into effect early 2023.

The Digital Markets Act builds on the horizontal Platform to Business Regulation, on the findings of the EU Observatory on the Online Platform Economy, and on the Commission’s extensive experience in dealing with online markets through competition law enforcement. In particular, the Digital Markets Act sets out harmonised rules defining and prohibiting unfair practices by gatekeepers and providing an enforcement mechanism based on market investigations. The same mechanism will ensure that the obligations set out in the regulation are kept up-to-date in the constantly evolving digital reality -- European Commission.

The EU Digital Markets Act contains provisions which might affect Apple in two ways. First, it would force Apple to allow app side loading. While not many users will go through the hassle of finding, downloading, and side loading apps, the App Store will likely remain the main source for Software in the Apple ecosystem. Side loading of apps is not only a hassle for regular users, but it also might pose some serious security issues. Apple currently vets individual apps that make it to the App Store so that the users can rest assured they are safe.


The second way Apple could be hurt by the Act refers to third party payments. Allowing third party payments would allow apps and developers to get payments by circumventing Apple’s cut of 30 percent applied to transactions processed by its own system.

Even so, the answer to the question of impact resides with the users, and whether they’ll be willing to re-enter their payment information, and trust third parties with sensitive info, rather than just push a button to make the payment via Apple, a company and a system they already trusted their payment information with.

Should the bill pass in its current form, non-compliance could trigger a fine amounting to 10 percent of the company’s annual revenue. Yet, it’s unsure whether it’s for the entire Apple revenue, its European revenue, or its services/App Store revenue.

Source: ped30 | Via: iClarified


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