EU Approves Landmark Legislation to Regulate Apple and Other Big Tech Firms

The European Union has approved landmark legislation to heavily regulate Apple.

In December 2020, the European Commission proposed the Digital Markets Act and Digital Services Act. The legislation was adopted by the European Parliament and is intended to address "gatekeeper" tech companies.

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 how long it has been there.

Gatekeepers Will Have To:

• Allow users to install apps from third-party app stores and sideload directly from the internet.
• Allow developers to offer third-party payment systems in apps and promote offers outside the gatekeeper's platforms
• Allow developers to integrate their apps and digital services directly with those belonging to a gatekeeper.
• Give developers access to any hardware feature, such as "near-field communication technology, secure elements and processors, authentication mechanisms, and the software used to control those technologies."
• Make messaging, voice-calling, and video-calling services interoperable with third-party services upon request.
• Ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription.
• Ensure that all apps are uninstallable.
• For the most important software (e.g. web browsers), not require this software by default upon installation of the operating system.
• Give users the option to change the default voice assistant to a third-party option.
• Share data and metrics with developers and competitors, including marketing and advertising performance data.
• Set up an independent "compliance function" group to monitor its compliance with EU legislation with an independent senior manager and sufficient authority, resources, and access to management.
• Inform the European Commission of their mergers and acquisitions.

But They Can No Longer:

• Give their own their own products, apps, or services preferential treatment or rank them higher than those of others.
• Reuse private data collected during a service for the purposes of another service.
• Establish unfair conditions for business users.
• Pre-install certain software applications.
• Require app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores.
• Require developers to use a particular browser engine, such as WebKit.

The Digital Services Act requires platforms to do more to police the internet for illegal content.

If a company ignores the rules, they will face fines of up to 10 percent of the company's annual turnover, or 20 percent in the event of repeated violations, as well as periodic fines of up to 5 percent of the company's annual turnover. The European Commission can impose additional sanctions, such as obliging a gatekeeper to sell a business or parts of it, or banning them from acquiring any company that provides services.

Apple has resisted attempts to change its operating systems. Apple paid a $5.5 million fine every week for months in the Netherlands instead of obeying orders from the Authority for Consumers and Markets to allow third-party payment systems in Dutch dating apps

Margrethe Vestager, the EU's antitrust chief, has set up a task force with about 80 officials expected to join, but some lawmakers want a bigger task force to counter the power of tech companies. The European Council needs to adopt the Digital Services Package before it goes into effect.

In addition to the European Union, Apple'secosystem is coming under intense scrutiny by governments around the world, including in the United States, the United Kingdom, Japan, and more. Experts are expecting a "brutal battle" between Apple and global regulators.

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