Apple’s iPadOS will now need to adhere to the European Union’s Digital Markets Act (DMA). This decision, announced by the European Commission on Monday, April 29th, increases the number of Apple platforms under the DMA to four, adding the company’s tablet operating system to previously designated platforms like iOS, the App Store, and the Safari browser.
Apple is given a six-month deadline to ensure that iPadOS complies with the DMA regulations, which include stringent requirements aimed at promoting market fairness and contestability.
DMA Compliance Requirements
The DMA’s provisions impose several specific requirements on Apple for its operation of iPadOS within the EU. These include:
- Ceasing self-preferencing: Apple must stop favoring its own services over those of competitors.
- Opening to third-party app stores: The company must allow alternative app stores on its platform.
- Enabling sideloading of apps: Users should be able to install apps from sources other than the official App Store.
- Supporting third-party payment options: Apple must allow the use of payment systems other than its own within apps.
- Non-WebKit browser support: Apple is required to support browsers based on engines other than its own WebKit on iPadOS.
Additionally, app developers working with iPadOS will be entitled to fair, reasonable, and non-discriminatory (FRAND) terms, ensuring a more open ecosystem for software distribution and maintenance.
The background to this decision starts with the EU’s initial designation of other Apple platforms and services under the DMA last fall, prompted by concerns over Apple’s market dominance and practices. Notably, the iPadOS was not initially included in the EU’s regulatory scope because it did not meet user number thresholds.
However, the Commission has the discretion to apply qualitative criteria in assessing the influence of tech platforms, which led to the inclusion of iPadOS after it was found that the platform significantly impacts both end users and business users.
The investigation revealed that business use of iPadOS was eleven times above the threshold, and end user engagement was also substantial and expected to increase.
Why Was iPadOS Included Under DMA Now?
The Commission’s findings highlighted the entrenched position Apple holds in the tablet market, particularly noting that both end users and business users are heavily reliant on iPadOS for various applications, including gaming. This “lock-in” effect, where users find it difficult to switch to alternative systems, was a key factor in designating iPadOS as a gatekeeper under the DMA.
Apple’s response to the new designation was to affirm its commitment to engaging with the European Commission to ensure compliance with the DMA while focusing on delivering quality products and addressing potential privacy and data security risks introduced by these regulatory changes.
Implications for Apple
The Commission’s investigation into iPadOS, which concluded in about eight months from its inception, represents the first market investigation undertaken since the DMA’s implementation. This development contrasts with a recent decision regarding Apple’s iMessage, which the EU decided not to designate under the DMA, thereby exempting it from requirements to make the messaging service interoperable with other platforms.
Apple now faces increased regulatory scrutiny and potential penalties for noncompliance with the DMA, which could include fines up to 10% of its global annual turnover. This regulatory pressure comes as the Commission also investigates other aspects of Apple’s compliance with the DMA, following a series of changes the company made to its platform operations in the EU.
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Featured Image courtesy of Henry Ascroft on Unsplash