The “Digital Markets Act” (DMA) targeting major tech companies, also known as “gatekeepers,” has come into effect this week, aiming to strengthen competition from smaller firms in the areas of digital advertising, online search, and app ecosystems. Apple and Google may likely face intensified competition.
The DMA, effective from March 6th, covers the services of six tech giants recognized as “gatekeepers,” notably companies with more than 45 million active monthly users and a market capitalization of more than €75 billion. Amazon, Apple, Google, Meta, Microsoft, and TikTok owner ByteDance are all included. These companies face fines of upto 10% of global annual revenue for violating DMA regulations and 20% for repeated violations.
Apple has been forced to open up certain segments of its EU app ecosystem under DMA, a move against which it had resisted due to potential revenue losses. Google, on the other hand, stands to gain with its advocacy for app download openness, considering it already allows third-party app stores on Android.
Zach Meyers, a Senior Associate at the Centre for European Reform, believes the new regulation presents more challenges for Apple than Google. Apple was recently fined $2 billion by the European Commission for antitrust regulation violation. It has appealed the decision, claiming no credible evidence of harm to consumers.
On a different note, Google’s business has been under threat of division due to its history with EU competition regulators. Although it has faced nearly $9 billion in fines from three antitrust rulings, the company views some changes of the new law positively. It is even presumed that Google has lobbied EU officials to allow third-party app stores in the DMA, opening the door to create its own iOS app store in the EU.
Some developers have criticized Apple’s new DMA-induced policy, which requires the company to allow app downloads outside the App Store in Europe, for potential financial downsides. This stance could potentially lead to conflicts with the EU under the new law. Back on March 7th, leveraging a 2021 US federal court ruling, Apple barred developer Epic Games from opening their app store for European iPhone users, citing Epic’s past and present behavior.“In light of Epic’s past and ongoing behavior, Apple has chosen to exercise this right,” an Apple representative announced.
