The EU passed strict antitrust rules that threaten Big Tech’s status quo — including Apple's App Store dominance
Joining le chat… Big Tech’s power is being reeled in over in Europe. On Tuesday, European Union lawmakers passed regulation aiming to stop tech giants from playing favorites with their own products (think: Apple apps on the App Store, Basics on Amazon). The Digital Markets Act (DMA) covers a lot of ground, including banning Amazon from using third-party seller data to inform its own products. Most notably, it could break Apple’s App Store monopoly.
- Apple’s core: The DMA could force Apple to let Euro customers download apps directly from developers, instead of only through the App Store.
- Profit pit: Apple raked in about $86B through its App Store last year, since it takes a 15 to 30% cut of paid downloads, subscriptions, and in-app purchases.
- Sliced and diced: Companies that violate the DMA could be hit with fines totaling 10% of annual global sales.
iOStressed… The DMA could disrupt more than just app downloads. The regulation says consumers must be allowed to choose their own digital assistant (sorry, Siri) and mandates that messaging platforms like iMessage and Meta’s WhatsApp be able to communicate with each other (read: group-chat chaos). European lawmakers aren't playing around.
Regulation matters, but enforcement is key… Huge fines mean tech behemoths will be forced to pay attention. But attention isn't the same as compliance, and regulation is sure to be followed by litigation. The EU's task force will have 80 officials, but pro-regulation lawmakers say more heads are needed to fight Big Tech's lawyers — so don't count the App Store’s dominance out just yet.