EU Targets Apple, Others for DMA Compliance Violations

The European Commission (EC) is moving swiftly to address Digital Markets Act (DMA) compliance violations that it says are at odds with the letter of the law. The chief villain here, of course, is Apple, but the EC notes that Amazon, Google, and Meta could also be violating the law.

“We heard discontent from stakeholders regarding Apple’s and Alphabet’s fee structures,” EC executive vice president Margrethe Vestager said. “Especially how some of the fees go against the ‘free of charge’ requirement of [the DMA]. Stakeholders also pointed to shortcomings of Apple’s [other] compliance solutions, by referring to the poor choice screen design, burdensome process for changing defaults, and inability for end users to uninstall several of Apple’s key apps.”

Apple’s belligerent non-compliance with the DMA is by now infamous and obvious to even its fans. But I find it interesting that the EU specifically called out one of the three big-bucket issues I raised recently in Mr. Cook, Tear Down That Walled Garden (Premium): That Apple, a company famed for its user experience designs, somehow implemented a convoluted, illogical, and inconsistent design for configuring the default web browser in iOS specifically to confuse users and prevent them from making a change.

“[One] objective of the DMA [is[] to open closed ecosystems to enable competition at all levels,” Vestager explains. “Under [the legal requirements] of the DMA, gatekeepers have an obligation to enable easy uninstallation of apps and easy change of default settings. They must also display a choice screen. Apple’s compliance model does not seem to meet the objectives of this obligation. In particular, we are concerned that the current design of the web browser choice screen deprives end-users of the ability to make a fully informed decision. Example: they do not enhance user engagement with all available options.”

Vestager goes on to explain that Apple also failed to make many of its in-box apps, like Photos, uninstallable by end users, while also preventing them from changing their default status in Cloud and elsewhere. These are also “required by the DMA,” she explains.

Of course, the biggest complaint against Apple—and Google—is that its App Store has onerous and arbitrary fees anticompetitive policy requirements. And this investigation touches on those malingering problems, too.

“Under the DMA, gatekeepers must allow business users, free of charge, to communicate freely with end users,” Vestager says, citing the DMA’s “anti-steering” rules. “And also to conclude contracts directly with their users. The aim of this provision is to promote competition between alternative sales channels in the app economy. To achieve this, consumers must have access to all the necessary information about their choices. Gatekeepers can no longer prevent their business users from informing their users within the app about cheaper options outside the gatekeeper’s ecosystem. That is called anti-steering and is now forbidden by law.”

“The way that Apple and [Google] implemented the DMA rules on anti-steering seems to be at odds with the letter of the law,” the continues. “Apple and [Google] still charge various recurring fees and still limit steering. We will investigate to what extent these fees and limitations defeat the purpose of the anti-steering provision and, by that, limit consumer choice.”

The EC has “many questions” about Apple’s belligerent attempts to bypass the DMA requirements in its App Store. It cites Apple’s crazy back and forth with Epic Games and its developer account, the unfairness of its alternative App Store and payment system policies, and the onerous fee structures it charges to third parties that wish to use other app stores or payment systems. “We will check if [Apple’s new policies] allow for real opportunities for app developers in line with the letter and the spirit of the DMA.” (They do not, so this one will be clear-cut.)

The EC is also investigating Meta for violating DMA rules for data combination. And it suspects that Amazon and Google continue to violate the DMA’s “self preferencing” rules, a “pillar of the DMA” that prevents gatekeepers from unduly promoting their own services over those of rivals.

Well, there you go: The EC feels that Apple, in particular, and probably Amazon, Google, and Meta, are almost certainly violating the spirit and letter of the law. This is obvious from the outside, but this process is how things work in the EU. It’s difficult to imagine that any of the issues noted above will not be found in violation of the DMA.

“We have a duty: ensuring full compliance with the DMA,” EU Commissioner Thierry Breton said. “Should we have indications of ineffective compliance or possible circumvention of the DMA, we will not hesitate to make use of the DMA’s full enforcement toolbox, including innovative tools that did not exist in antitrust enforcement such as the retention orders. And if our investigations conclude that there is lack of full compliance with the DMA, gatekeepers will face heavy fines.”

It can’t happen quickly enough.