EU Provisionally Agrees on Law That Would Force Apple to Allow Alternative App Stores, Sideloading, and iMessage Interoperability

A new law that would force Apple to allow user access to third-party app stores and permit the side loading of apps on iPhones and iPad was agreed upon by European lawmakers.

The European Council and European Parliament said on Friday they had reached a political agreement on the Digital Markets Act, which will target many of the services offered by tech giants and force them to open up to other businesses.

The EU announced today that they will have to open up and cooperate with smaller messaging platforms if they request.

Apple fought hard in the trial to keep its own payment system in the App Store.

Apple would have to allow users to uninstall its stock apps so that they can replace them with third-party alternatives.

Several other demands that tech companies will have to abide by and which would surely impact Apple's services and platforms are included in the broad scope of the DMA. According to the proposed law, companies with a value of more than $75 billion, annual sales of $7.5 billion, and at least 45 million monthly users will meet its criteria.

Gatekeepers Will Have To:

• Ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription.
• For the the most important software (e.g. web browsers), not require this software by default upon installation of the operating system.
• Ensure the interoperability of their instant messaging services' basic functionalities.
• Allow app developers fair access to the supplementary functionalities of smartphones (e.g. NFC chip).
• Give sellers access to their marketing or advertising performance data on the platform.
• Inform the European Commission of their acquisitions and mergers.

But They Can No Longer:

• Rank their own products or services higher than those of others (self-preferencing).
• 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.

A fine of up to 10% of a company's total global turnover is possible if a gatekeeper violates the rules laid down in the legislation. A fine of up to 20% of global turnover can be imposed for a repeat offense.

The European Commission can impose behavioral or structural remedies on a company if it fails to comply with the rules for at least three times in eight years.

The European Union has had to impose record fines over the past 10 years for certain harmful business practices by very large digital players," said Cédric O, French Minister of State with responsibility for digital. "The DMA will directly ban these practices and create a fairer and more competitive economic space for new players and European businesses. These rules are key to stimulating and unlocking digital markets, enhancing consumer choice, enabling better value sharing in the digital economy and boosting innovation. The European Union is the first to take such decisive action in this regard and I hope that others will join us soon."

The European Parliament and the Council will need to approve the legislation once it is in place. The regulation has to be implemented in six months. Digital competition chief Margrethe Vestager said today that she expected the DMA to come into force in October.

Should the Digital Markets Act become law, Apple will have to make major changes to its platform to accommodate the requirement to allow for non-App Store. Apple is concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for its users.

In the United States, Apple is facing similar legislation that could result in major changes to the tech industry.

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