Tuesday, July 16, 2024

Can the EU break Google and Apple’s app store dominance? – Marketplace

Must read

The congressional spending bill put forward on Tuesday is 4,000 pages long. But there’s something missing: a slew of bills concerning online privacy, liability for social media companies and anti-competitive practices in tech.

The $1.7 trillion omnibus bill was seen as the last chance for passing these bills before a divided Congress takes office next year. But even if the U.S. Congress isn’t acting on them, other countries are.

The European Union’s Digital Markets Act takes aim at “gatekeepers” — Big Tech companies that provide a connection between consumers and other services, like Apple’s App Store. It aims to stop those companies from stifling competition.

“European law — not just in the tech space but more generally — has been much more aggressive in trying to control dominance and create level playing fields,” said Daniel Crane at the University of Michigan.

The EU regulation, which takes effect in 2024, could disrupt the whole app ecosystem, Crane said. For instance, it requires that Apple allow iPhone users to download apps from places other than the App Store or that iMessage users be able to communicate with users of WhatsApp.

“It’s not that it’s impossible for the Big Tech companies to have a different system, but at some point, it does become very difficult,” Crane said. “And so Europe begins exerting influence globally.”

In the past, Big Tech companies have often found ways around Europe’s rules, according to Nicholas Rodelli, an analyst at CFRA.

“We think that European regulators have learned from that,” he said.

This legislation has better enforcement mechanisms, per Rodelli, like expensive recurring fines and expedited prosecution.

And it’s not just happening in Europe, said Eric Seufert, an analyst with Mobile Dev Memo. “The momentum is heading in that direction anyway, globally.”

South Korea, India and Japan are also taking action, but Seufert said the moment to spur competition among app marketplaces may have already passed.

“For the most part, consumers have already established habits that are probably pretty sticky and difficult to disrupt,” he said.

The law could have bigger effects on digital ecosystems that are still developing, he said — like the Metaverse.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Latest article