Context: The European Commission will hold a full-day Apple DMA Compliance Workshop in Brussels on Monday, March 18. Just this week, Apple made another round of modifications to its EU-specific rules in an effort to avoid or at least complicate enforcement (March 12, 2024 games fray article).
What’s new: The EC has just provided the agenda to registered participants (games fray will participate via the livestream). There are four main topics. For each of them, the EC will lay out the legal framework, Apple will present its proposed compliance solution, and then there will be a Q&A on the presentation and an “open table discussion” where Apple’s critics can voice concerns.
Direct impact: No immediate decisions will be made on Monday. The EC will need time to digest divergent views. Prior to formal enforcement action, the EC would normally give Apple another chance to make adjustments.
Wider ramifications: The workshop will be the first of six such events, and objectively the most anticipated one. The Google workshop that takes place three days later would normally be more important given Android’s high market share in Europe, but it appears that the DMA is far less likely to make any meaningful impact on Android than on iOS, as Google can claim that alternative app stores and direct installs from the web are already supported, though in ways that maintain the Google Play Store’s dominant market position (March 11, 2024 games fray article). Even against Apple, the enforceability of the DMA to the effect of creating a mass market opportunity for alternative app stores is doubtful, and a deputy minister of the German government has already gone on the record with a comment that a “tougher upgrade” may be needed to make the DMA work, which games fray has consistently said since January.
The time zone for the Brussels event is Central European Time (same time as Paris, Berlin and Rome; one hour ahead of UK time).
9:00 AM to 9:15 AM: Introductory remarks by the Commission
This will presumably be a welcome address and a quick explanation of the format and certain ground rules.
9:15 AM to 10:20 AM: choice screens and default settings
The statutory basis for this part, which the Commission will explain, is Art. 6(3) DMA:
3. The gatekeeper shall allow and technically enable end users to easily un-install any software applications on the operating system of the gatekeeper, without prejudice to the possibility for that gatekeeper to restrict such un-installation in relation to software applications that are essential for the functioning of the operating system or of the device and which cannot technically be offered on a standalone basis by third parties.
The gatekeeper shall allow and technically enable end users to easily change default settings on the operating system, virtual assistant and web browser of the gatekeeper that direct or steer end users to products or services provided by the gatekeeper. That includes prompting end users, at the moment of the end users’ first use of an online search engine, virtual assistant or web browser of the gatekeeper listed in the designation decision pursuant to Article 3(9), to choose, from a list of the main available service providers, the online search engine, virtual assistant or web browser to which the operating system of the gatekeeper directs or steers users by default, and the online search engine to which the virtual assistant and the web browser of the gatekeeper directs or steers users by default.
In this context, Apple may have to explain why (or, if not the forever, for how long) it prevents browsers that users may set as default browsers, but which may in the future come with alternative browser engines, from executing home-screen web apps. Apple’s initial plan was to disable home-screen web apps altogether, but changed mind after user feedback (March 1, 2024 games fray article), which is credible as Apple may have received complaints (based on an iOS 17.4 beta version) from people who saw a severe degradation of the user experience when using the xCloud game streaming service or, for one example of many, the Starbucks web app.
The previous state of affairs (no home-screen web apps at all) was anticompetitive as it materially adversely affected the usability of web apps on iOS. But the current one results in a self-preferencing of Apple’s own browser, Safari. It could be that Apple will develop operating system-level sandboxing functionality for web apps and subsequently enable all browsers to execute home-screen web apps.
10:40 AM to 1:00 PM: Apple App Store and app distribution on iOS
This block is slightly longer than each of the others, but in terms of importance, it would probably deserve half, if not two thirds or three quarters, of the day.
Three passages of the DMA are the statutory basis: Art. 5(4), 6(4) and 6(12).
Art. 5(4): The gatekeeper shall allow business users, free of charge, to communicate and promote offers, including under different conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper.
Apple doesn’t allow all such promotions, and argues that the DMA gives it the right to protect privacy and security. But the restrictions in this area are far-reaching.
Art. 6(4):
The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications or software application stores using, or interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core platform services of that gatekeeper. The gatekeeper shall, where applicable, not prevent the downloaded third-party software applications or software application stores from prompting end users to decide whether they want to set that downloaded software application or software application store as their default. The gatekeeper shall technically enable end users who decide to set that downloaded software application or software application store as their default to carry out that change easily.
The gatekeeper shall not be prevented from taking, to the extent that they are strictly necessary and proportionate, measures to ensure that third-party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper, provided that such measures are duly justified by the gatekeeper.
Furthermore, the gatekeeper shall not be prevented from applying, to the extent that they are strictly necessary and proportionate, measures and settings other than default settings, enabling end users to effectively protect security in relation to third-party software applications or software application stores, provided that such measures and settings other than default settings are duly justified by the gatekeeper.
That part relates to the permission of alternative app stores. Apple will allow, with some restrictions, “sideloading” (a pejorative term for direct installs from the web).
Art. 6(12): The gatekeeper shall apply fair, reasonable, and non-discriminatory general conditions of access for business users to its software application stores, online search engines and online social networking services listed in the designation decision pursuant to Article 3(9).
This FRAND requirement applies only to Apple’s own App Store, not to the terms Apple imposes on alternative app stores.
2:00 PM to 3:10 PM: Apple iOS — interoperability and tying
The statutory basis for the interoperability part is Art. 6(7) DMA:
Art. 6(7): The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper. Furthermore, the gatekeeper shall allow business users and alternative providers of services provided together with, or in support of, core platform services, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features, regardless of whether those features are part of the operating system, as are available to, or used by, that gatekeeper when providing such services.
The gatekeeper shall not be prevented from taking strictly necessary and proportionate measures to ensure that interoperability does not compromise the integrity of the operating system, virtual assistant, hardware or software features provided by the gatekeeper, provided that such measures are duly justified by the gatekeeper.
The biggest question here is not interoperability in a traditional and narrow sense, but the theory that this statute bars Apple from charging a Core Technology Fee (CTF) of €0.50 per install per year when apps are installed outside its App Store or, under certain conditions, even when installed via its App Store (March 13, 2024 games fray article). The EU has traditionally defined interoperability in terms of data exchange for the purpose of sending messages, sharing documents and network connectivity. When executing an app on top of an operating system via an application programming interface (API), it’s operation, but not necessarily interoperation.
The statutory basis for tying is Art. 5(7):
Art. 5(7): The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper’s core platform services.
The web browser engine part raises the problem discussed further above with respect to home-screen web apps, but also others. The Mozilla Foundation, which makes Firefox, Google and presumably also Microsoft and others are dissatisfied with Apple’s rules that limit the potential for browsers with alternative engines to succeed.
As to payment services for in-app purchases, the problem is that Apple (like Google) charges effectively the same commission as when its own payment processing service is used. A 3% discount is simply offset by the cost of other payment service providers.
3:30 PM to 4:40 PM: Data-related provisions
Three articles are the statutory basis: Art. 5(2), Art. 6(9) and Art. 6(10):
Art. 5(2):
The gatekeeper shall not do any of the following:
(a) process, for the purpose of providing online advertising services, personal data of end users using services of third parties that make use of core platform services of the gatekeeper;
(b) combine personal data from the relevant core platform service with personal data from any further core platform services or from any other services provided by the gatekeeper or with personal data from third-party services;
(c) cross-use personal data from the relevant core platform service in other services provided separately by the gatekeeper, including other core platform services, and vice versa; and
(d) sign in end users to other services of the gatekeeper in order to combine personal data, unless the end user has been presented with the specific choice and has given consent within the meaning of Article 4, point (11), and Article 7 of Regulation (EU) 2016/679.
Where the consent given for the purposes of the first subparagraph has been refused or withdrawn by the end user, the gatekeeper shall not repeat its request for consent for the same purpose more than once within a period of one year.
This paragraph is without prejudice to the possibility for the gatekeeper to rely on Article 6(1), points (c), (d) and (e) of Regulation (EU) 2016/679, where applicable.
Art. 6(9): The gatekeeper shall provide end users and third parties authorised by an end user, at their request and free of charge, with effective portability of data provided by the end user or generated through the activity of the end user in the context of the use of the relevant core platform service, including by providing, free of charge, tools to facilitate the effective exercise of such data portability, and including by the provision of continuous and real-time access to such data.
Art. 6(10): The gatekeeper shall provide business users and third parties authorised by a business user, at their request, free of charge, with effective, high-quality, continuous and real-time access to, and use of, aggregated and non-aggregated data, including personal data, that is provided for or generated in the context of the use of the relevant core platform services or services provided together with, or in support of, the relevant core platform services by those business users and the end users engaging with the products or services provided by those business users. With regard to personal data, the gatekeeper shall provide for such access to, and use of, personal data only where the data are directly connected with the use effectuated by the end users in respect of the products or services offered by the relevant business user through the relevant core platform service, and when the end users opt in to such sharing by giving their consent.
In the public debate so far, there has been much more of a focus on app store issues, followed at a distance by browser engine issues, than on this part.
4:40 PM to 5:00 PM: Conclusions by the Commission
The most likely result is that the Commission will say it has identified a need for further analysis and discussions, making a subsequent enforcement action a possibility.
The EC and, in an abstract sense, the DMA have had a first victory over Apple as Epic Games’ developer account for an alternative iOS app store was quickly reinstated (March 8, 2024 games fray article). But that is only a first step. Epic’s situation is unique among game makers because Fortnite is the only AAA game that Apple ever threw out of its own App Store (over a dispute in the U.S. that started in August 2020). Generally speaking, Apple’s DMA-related rules make alternative app stores an option primarily for apps that Apple wouldn’t carry in its own store (such as “adult content”) or where Apple’s commercial terms are prohibitive (non-fungible tokens). There may also be some niches where high lifetime revenues are generated per installation of an app. But by and large, Apple’s rules are designed so that game and other app makers will generally prefer to go where most customers are, as Apple doesn’t allow alternative stores to offer fundamentally better terms that would be able to overcome the App Store’s strong network effects (March 3, 2024 games fray article).
Apple’s critics raise a number of mostly valid points, but have so far not presented a convincing plan to win the end game (March 4, 2024 games fray article). As a result, it is highly unlikely that Apple will make concessions that would truly open up the market (March 5, 2024 games fray article).
The Monday workshop may be instructive, but it won’t be decisive.