EU Plans to Regulate Apple Delayed to Spring 2023 Amid Preparations to Enforce New Rules

[MacRumors]

The European Union's wide-reaching new regulations to target Apple and other big tech companies will come into effect in early 2023, according to EU antitrust chief Margrethe Vestager (via TechCrunch).

The EU's Digital Markets Act (DMA) could force Apple to make major changes to the App Store, Messages, FaceTime, third-party browsers, and Siri in Europe. For example, it could be forced to allow users to install third-party app stores and sideload apps, give developers the ability to closely interoperate with Apple's own services and promote their offers outside the App Store and use third-party payment systems, and access data gathered by Apple.

One of the more recent additions to the DMA is the requirement to make messaging, voice-calling, and video-calling services interoperable. The interoperability rules theoretically mean that Meta apps like WhatsApp or Messenger could request to interoperate with Apple's iMessage framework, and Apple would be forced to comply.

In a speech at the International Competition Network conference in Berlin, Vestager said that the DMA "will enter into force next spring and we are getting ready for enforcement as soon as the first notifications come in." The DMA was originally supposed to come into effect in October 2022, suggesting that there has been a slight delay in preparing for the new legislation. Vestager also mentioned that the first enforcements could follow soon after the regulation is in place, and discussed the EU's ongoing preparations:

This next chapter is exciting. It means a lot of concrete preparations. It's about setting up new structures within the Commission, pooling resources... based on relevant experience. It's about hiring staff. It's about preparing the IT systems. It's about drafting further legal texts on procedures or notification forms. Our teams are currently busy with all these preparations and we're aiming to come forward with the new structures very soon.

EU lawmakers provisionally approved the DMA in March. The European Parliament and the European Council must give final approval to the legislation before it can come into force. Big tech companies that meet the criteria to be designated a "gatekeeper" must declare their status to the European Commission within three months after the regulation comes into effect, and there is an additional two month period for the EU to confirm a gatekeeper's designation, meaning that it may still be some time before companies face enforcement measures.

Apple is almost certain to be classified as a "gatekeeper," due to the size of its annual turnover in the EU, its ownership and operation of platforms with a large number of active users, and its "entrenched and durable position" due to how long it has met these criteria, and will therefore be subject to the rules set out in the DMA.

Beyond the European Union, Apple's ecosystem is increasingly coming under intense scrutiny by governments around the world, including in the United States, the United Kingdom, Japan, South Korea, and more, with a clear appetite from global regulators to explore requirements around app sideloading and interoperability. Vestager suggested that a significant level of cooperation is already occurring as part of preparations for the DMA, and urged national competition authorities around the world to closely cooperate:

For that next chapter, close cooperation with competition authorities, both inside and outside the EU will be crucial. This is irrespective of whether they apply traditional enforcement tools or have developed their own specific regulatory instruments, like the German digital regulation. Close cooperation will be necessary because we will not be short of work and we will not be short of novel services or practices to look at. And the efforts needed at a global scale are enormous. So we will need to work together more than ever.

Many of you will be watching the roll out of the DMA with great interest. This will be a mutual learning experience. The EU has worked hard to find the right balance, and I think we have come up with something that is tough but also very fair. It goes without saying that the more we, as an international competition community, are able to harmonize our approach, the less opportunity there will be for global tech giants to exploit enforcement gaps between our jurisdictions.

The DMA says that gatekeepers who ignore the rules will face fines of up to 10 percent of the company's total worldwide annual turnover, or 20 percent in the event of repeated infringements, as well as periodic penalties of up to 5 percent of the company's total worldwide annual turnover. Where gatekeepers perpetrate "systematic infringements," the European Commission will be able to impose additional sanctions, such as obliging a gatekeeper to sell a business or parts of it, including units, assets, intellectual property rights, or brands, or banning a gatekeeper from acquiring any company that provides services in the digital sector.

So far, Apple has heavily resisted attempts by governments to enforce changes to its operating systems and services. For example, Apple simply chose to pay a $5.5 million fine every week for ten weeks in the Netherlands instead of obey orders from the Authority for Consumers and Markets (ACM) to allow third-party payment systems in Dutch dating apps. Earlier this week, the ACM announced that Apple's rules surrounding Dutch dating apps remain insufficient.

Article Link: EU Plans to Regulate Apple Delayed to Spring 2023 Amid Preparations to Enforce New Rules

 

[Colstan]

Darn, I was looking forward to my EU version of an iPhone and Mac. That's especially remarkable, since I am in the USA.

 

[rme]

No way the EU is going to force Apple to allow downloading of apps from the internet and third-party app stores on iOS. It would make it impossible to ban apps that don't censor speech.

 

[contacos]

I believe it when I see it.

 

[byke]

Another reason why the EU is no longer fit for purpose.
We saw that with vaccine rollout, we have seen that with the slow response regarding Ukraine. And this idea that EU technocrats have a better understanding of freedoms and technology, than the actual industry is laughable.

 

[erikkfi]

This gives Apple and others more time to figure out how they won’t comply.

 

[vipergts2207]

Shows that they're trying to take their time and get it right rather than try to rush it through.

 

[jlc1978]

Darn, I was looking forward to my EU version of an iPhone and Mac. That's especially remarkable, since I am in the USA.

No way the EU is going to force Apple to allow downloading of apps from the internet and third-party app stores on iOS. It would make it impossible to ban apps that don't censor speech.

These two comments, while probably sarcastic, brings up some good points on sideloading. If Apple is forced to allow sideloading, enforcing laws regulating speech become much more difficult. With the Apple store, Apple acted as the gatekeeper for compliance since installing apps outside of it involved jumping through hoops.

With sideloading, the EU could no longer expect Apple to act as their gatekeeper; but will have to go directly to the developer, which in some cases may simply be beyond the EU's control. A developer outside of the EU has no reason to comply if they don't want to; and I suspect some of the more fringe ones will actually take pride in being "silenced" and use it to pump up their importance.

Their is a broader issue beyond the EU - countries such as China will probably not want sideloading to be official since they also no longer have a compliant Apple to control what their citizens can download. Given China's market is as large as the EU's you could see different iPhones for different markets; and the ability to shutdown, or enable, sideloading in software based on geolocation.

Shows that they're trying to take their time and get it right rather than try to rush it through.

I have complete faith in our EU overlords' ability to mess this up and then claim it wasn't their fault.

 

[cb3]

The EU loves to regulate/ban things. Where would we be without the Nanny State? SOME regulation is NEEDED. However, bodies like this don't seem to know when to stop.

 

[Havoc035]

Big tech companies that meet the criteria to be designated a "gatekeeper" must declare their status to the European Commission within three months after the regulation comes into effect

I can already see Apple declare status in the absolute final hour of this time limit. Which arguably makes sense.

 

[rme]

The EU loves to regulate/ban things. Where would we be without the Nanny State? SOME regulation is NEEDED. However, bodies like this don't seem to know when to stop.

Every new power that's given to them will be abused. They're now going to use the covid fund precedent to build a giant war machine to expand their empire. The EU is a cancer that has to be eradicated.

 

[philrock]

No one wins here except Apple competitors. Consumers get a possibly more capable but less stable and less secure device. This law is watering down all the things most people appreciate about their iPhones. Hopefully, Apple makes a separate device for the EU so the rest of us don't have to suffer.

 

[threesixty360]

funny that the only company that will lose out in all this is Apple.
Its like they designed a whole set of laws to target 1 company lol
And are pretending its going to cut everyone to size... like who?
Companies with propriety systems like Oracle and Microsoft get to do whatever...
Companies with ridiculous monopolies in advertising like google, pretty much untouched etc.

Every angle that Apple use to differentiate themselves from their competitors is basically attacked.

Its a shakedown. Nothing more, nothing less.

I suppose you can bend over and take it or lawyer up.
Didn't Apple defeat Vesteger over the Irish tax thing? Seems very personal!

 

[960design]

I'm all for combining messaging, et cetera... makes extraction easier.

App store stuff is "idocracy" within the media. You can deploy apps outside the appstore whenever you want. Check https://app.starbucks.com They host, they advertise, they handle their own payment gateway with no % to apple.

If you want to use App Store hosting, authentication, storage, advertising, payment gateway you get charged 15% (30% if you are big time). Much better than the old disc printing days of 50-80% through a distributor... if you could even get them to produce your creation.

 

[nastysailboat]

This will not be better for the little developer or the customer. Only for big corporations.

 

[WiseAJ]

It’s going to be indefinitely shelved like Apple’s CSAM scanning.

 

[nastysailboat]

funny that the only company that will lose out in all this is Apple.
Its like they designed a whole set of laws to target 1 company lol
And are pretending its going to cut everyone to size... like who?
Companies with propriety systems like Oracle and Microsoft get to do whatever...
Companies with ridiculous monopolies in advertising like google, pretty much untouched etc.

Every angle that Apple use to differentiate themselves from their competitors is basically attacked.

Its a shakedown. Nothing more, nothing less.

I suppose you can bend over and take it or lawyer up.
Didn't Apple defeat Vesteger over the Irish tax thing? Seems very personal!

Apple is getting attacked because these EU rules are being pushed by corporations like PayPal, epic game and Spotify because Apple doesn’t allow them to collect the data they need to survive without permission. This will only cause more trouble for the customer as it will create less ease of use and a less secure iOS

 

[nastysailboat]

I'm all for combining messaging, et cetera... makes extraction easier.

App store stuff is "idocracy" within the media. You can deploy apps outside the appstore whenever you want. Check https://app.starbucks.com They host, they advertise, they handle their own payment gateway with no % to apple.

If you want to use App Store hosting, authentication, storage, advertising, payment gateway you get charged 15% (30% if you are big time). Much better than the old disc printing days of 50-80% through a distributor... if you could even get them to produce your creation.

Web apps are the future

 

[nastysailboat]

Shows that they're trying to take their time and get it right rather than try to rush it through.

No it does not. They’re going to force Apple to stop on a dime and reverse things create a new iOS version in a matter of days and Apple and iOS will be so horrible and full of bugs.

 

[Razorpit]

If Apple is forced to allow sideloading, enforcing laws regulating speech become much more difficult. With the Apple store, Apple acted as the gatekeeper for compliance since installing apps outside of it involved jumping through hoops.

1984 was meant to be a warning, not an instruction manual.

 

[Ronald Reagan]

I have some advice for the EU governing bodies. Design your own smartphone from scratch with your own OS and leave Apple the heck alone. Cripes. They obviously know so much about what the people of Europe want and need; wants and needs that aren’t being fulfilled by Apple.

 

[dz5b609]

For the people who aren't very familiair with the EU lawmaking machine, early 2023 actually means 2024 by the earliest and then 2025 before you're gonna see effects because of cooldown periods.

 

[blazerunner]

This gives Apple and others more time to figure out how they won’t comply.

THIS.

Apple doesn't respect standards, to them it's either their way or the highway.

 

[jlc1978]

If you want to use App Store hosting, authentication, storage, advertising, payment gateway you get charged 15% (30% if you are big time). Much better than the old disc printing days of 50-80% through a distributor... if you could even get them to produce your creation.

That's what has been forgotten; and I suspect Apple will simply change its pricing model so that things which now are bundled will be a seperaet charge, hurting small developers. I could see them say, sure, use 3rd party payments, we'll just charge for d/l's instead if you offer subscriptions and fall into certain app categories. There is no reason for Apple to underwrite EPIC's hosting for free. Alternatively, if sideloading is allowed Apple could simply say we do not host apps that can also be sideloaded.

Apple is getting attacked because these EU rules are being pushed by corporations like PayPal, epic game and Spotify because Apple doesn’t allow them to collect the data they need to survive without permission.

I wonder how the privacy vs. access to data will play out. If Apple has to handover data and is not allowed to let users choose not to share it, clearly they are not liable for any privacy violations.

This will only cause more trouble for the customer as it will create less ease of use and a less secure iOS

I suspect smal developers may get hurt as well depending on how Apple reacts.

 

[IamTimCook]

funny that the only company that will lose out in all this is Apple.

Not just Apple… the bigger more pricey App suites like Adobe will be hit hard as you can get a cracked version of the suite on the once implemented new iOS version of the “Pirate Bay.”
Only wonder if this law bleeds over to iPadOS or is the EU really concerned about devs or do they just want to unlock message encryption on iPhones?

I read a report (can’t find to reference) that said “30% of Adobe users are using a cracked version for PCs.”