EU Provisionally Agrees on Digital Markets Act – Would Force Apple to Allow App Sideloading, Alternative App Stores, More

European Union lawmakers have provisionally agreed on a new law that would force Apple and other companies to permit app sideloading on their devices, user access to third-party apps, as well as other changes intended to bring fairness to the digital sector.

The European Council and European Parliament said on Friday they had reached a provisional agreement on the Digital Markets Act (DMA), which will target many of the services offered by tech giants.

Today’s announcement focuses on large messaging services like WhatsApp, Facebook Messenger, and iMessage, which will have to “open up and interoperate with smaller messaging platforms, if they so request,” says the EU. “Users of small or big platforms would then be able to exchange messages, send files or make video calls across messaging apps, thus giving them more choice.”

Under the DMA, Apple would be forced to allow App Store developers to use third-party payment options instead of Apple’s own payment system.

Apple would also be required to allow users to uninstall its default Safari browser and other stock apps on devices so that they can be replaced with third-party options if they so decide.

Companies with a value of more than €75 billion ($83 billion), annual sales of €7.5 billion, and at least 45 million monthly users will meet the act’s “gatekeeper” criteria, which comes with the following obligations and commitments.

Gatekeepers Will Have To:

• Ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription.
• For 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.

If a gatekeeper violates the rules laid down in the legislation, it risks a fine of up to 10% of its total worldwide turnover. For a repeat offense, a fine of up to 20% of its worldwide turnover may be imposed.

If a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioral or structural remedies.

The legislation’s final wording is still being worked on, but once that is in place, the European Parliament and the Council will need to approve it. The regulation must be implemented within six months after its entry into force.

Apple said it was “concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users.”

Apple also faces similar types of legislation in its home country of the United States. U.S. House lawmakers in June introduced antitrust bills that would result in major changes to the way Apple and other tech firms operate if passed.