Apple’s big changes, courtesy of the EU

Due to the EU’s Digital Markets Act, Big Tech companies like Apple will have to make some changes.

Photo by Jaap Arriens/NurPhoto via Getty Images

Some significant changes are coming for Apple devices in the European Union, and not just USB-C chargers.

We’re talking about “sideloading” — downloading software through third-party sources.

It’s something Apple has long resisted, forcing both iOS users and app devs to deal with its App Store:

  • Apple says it ensures safety and privacy, claiming third-party stores could result in users downloading malicious or spam apps.
  • It also nabs 30% of App Store sales, something companies including Epic Games, Meta, and Spotify have decried.

Why change now?

The EU’s new Digital Markets Act (DMA) is designed to regulate its digital economy and prevent tech “gatekeepers” from using unfair practices.

  • Gatekeepers are defined as companies with a market cap of ~$80B+ (Apple’s  is $2T+) and 45m monthly EU users.

Among other rules, gatekeepers must allow sideloading, or else face fines.

Apple…

… will lose money from its EU commissions, and potentially ad revenue due to fewer eyes on App Store ads, per Yahoo Finance’s Dan Howley.

But the App Store only accounts for 6% of Apple’s total revenue, per Bloomberg, of which the EU — Apple’s second-largest market behind the Americas — likely makes up less than a third.

Apple hasn’t made a decision on other DMA rules, including whether devs can use third-party, in-app payment systems.

What about outside the EU?

It’s not clear whether Apple will make sweeping changes or only where it must, or if other nations’ lawmakers will follow in the EU’s footsteps. In the US, a DOJ antitrust suit against Apple may arise.

In the short term, some companies’ shares did get a bump on Apple’s news, including Match (10%) and Spotify (9.7%).

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