Apple’s DMA troubles in Europe continue, but a solution may be in sight

While the struggle continues and Apple is urging the EU to repeal the legislation, the company may be inching toward some type of settlement with the EU over alleged violations of the bloc’s Digital Markets Act, according to The Financial Times.

It’s not a happy talk. Apple knows it needs to find some kind of deal with the EU under the DMA, even if it disagrees with the law, the implementation, and what it is required to do (which it does). Apple seems to have hundreds of the company’s salaried staffers dedicated to trying to find some way to meet Europe’s highly mutable DMA demands while maintaining what makes Apple what it is. 

It is also true that Apple and Europe have been in discussion about the creation and implementation of the DMA since day one, with Apple frequently saying it has tried, and failed, to gain clarity on sections of the act. That lack of clarity is particularly hard to stomach — how do you reach a deal when people don’t tell you what they want?

The art of the (bad) deal

This week’s regulatory story explains that Apple might be forced change some of its business practices following the punishing €700m fine it was hammered with for DMA breaches.

Apple has already changed some of those practices to meet the demands of the DMA, but must now find a way to continue to provide developers access to its technologies without treating some groups of developers unfairly. 

Apple’s Core Technology Fee was an initial attempt to achieve this, but regulators were unimpressed. The report indicates that discussions on a viable solution around this are ongoing, though not yet finalized.

Apple, Europe’s other R&D company

Apple has made no secret of its opinion that aspects of the implementation of the DMA mean it is forced to supply competitors with technology at no charge, even though its competitors are not held to the same standard. 

It has also complained that the manner of the DMA’s application means it must figure out how to make apps and services available to competitors for use in their products — even before it gets to release them to its own customers. In part, this is why parts of Apple Intelligence are unavailable in Europe.

Achieving that kind of parity has significant cost implications and means European customers must get used to lengthy waits until new features become available to them. There must surely be an opportunity to strike a better balance between the security and usability interests of customers and those of Apple’s competitors?

Apple’s ‘dark patterns’

Europe argues that its attempt is nothing to do with forcing compromise on platforms, telling the FT, “Compliance means that developers get a real chance and that users get a real choice, not buried under a maze of dark patterns from gatekeepers.”

At the same time, it is easy to argue that the implementation of the DMA also means consumers lose choice, in that they can no longer access the pure Apple experience they want. Indeed, you could argue that opting for the Apple-curated experience is itself a choice, particularly as Apple’s platform is a unique technology, and the company does not dominate any of its markets. 

Samsung, for example sells more smartphones, so why is it not being encumbered by DMA restrictions? “Apple has led the way in building a unique, innovative ecosystem that others have copied — to the benefit of users everywhere. But instead of rewarding that innovation, the DMA singles Apple out while leaving our competitors free to continue as they always have,” the company said.

Clarity, European style

Europe does hold the power in this negotiation. And while it hasn’t yet settled its case with Apple, the threat is that if the company cannot be bought into line, it will face periodic penalty payments up to 5% of global income. 

This threat is significant, particularly as Apple has consistently accused regulators of refusing to provide it with that clarity on compliance, and of also frequently moving the goalposts for what the company must do to comply. (Imagine if the road you drove on had a fluctuating speed limit that changed without warning — this is likely how Apple sees its experience of working with the EU.)

That experience is the context that seems to have created a general opinion within Cupertino that Europe’s DMA is not about real competition, but a political apparatus with which to attack US tech firms. If that feeling prevails, Europe really should get ready for trade-based reprisals from the Trump Administration, which has already uttered warnings concerning the application of the DMA.

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