The European Union has opened two “specification proceedings” on Apple under the bloc’s Digital Markets Act (DMA) that will see it instructing the iPhone maker on how to comply with certain interoperability provisions in the market fairness regulation. If Apple fails to meet the Commission’s requirements it could risk fines of up to 10% of its global annual turnover.
The European Commission, which enforces the DMA on Apple and the other six gatekeepers in scope of the pan-EU regulation, opened its first non-compliance proceeding on Apple back in March, probing a range of concerns. Reporting preliminary findings in June, the bloc said it suspected Apple had breached the rulebook in relation to how it operates its App Store. But the wider investigation continues.
The tech giant has made a number of changes to its DMA compliance plan both before and since the Commission’s preliminary breach finding. But the EU looks set to dial up its intervention on Apple in relation to interoperability-related changes.
This is one of the areas where criticism of Apple’s approach to the DMA has, broadly speaking, been loud, with — for example — concerns raised over the information screens it displays to iOS users when they are poised to move away from using Apple’s technologies and adopt alternatives techs for particular functions.
The EU also recently concluded a long running antitrust investigation of Apple’s contactless payment tech where it accepted binding commitments from the company to ensure interoperability for developers of rival wallet tech. So the Commission may be hoping to draw on what it’s learnt from that case to clarify related areas of Apple’s DMA compliance.
While the regulation already includes a list of dos and don’ts that the EU expects gatekeepers to follow, there can still be scope for interpretation over exactly how the specific rules apply in particular contexts. So the law also contains powers letting the Commission spell out compliance when it has an open proceeding on a gatekeeper — as is the case with Apple.
Specifically, with these two latest proceedings, the bloc will be telling Apple how to provide interoperability to connected devices seeking to tap into iOS’s connectivity features, such as in areas like notifications and device pairing.
It also plans to instruct it on how to handle interoperability requests from app developers building software for its mobile and tablet platforms iOS and iPadOS — both of which are regulated as so-called “core platform services” under the the DMA.
“The first proceeding focuses on several iOS connectivity features and functionalities, predominantly used for and by connected devices,” the Commission wrote in a press release. “Connected devices are a varied, large and commercially important group of products, including smartwatches, headphones and virtual reality headsets. Companies offering these products depend on effective interoperability with smartphones and their operating systems, such as iOS. The Commission intends to specify how Apple will provide effective interoperability with functionalities such as notifications, device pairing and connectivity.”
“The second proceeding focuses on the process Apple has set up to address interoperability requests submitted by developers and third parties for iOS and iPadOS. It is crucial that the request process is transparent, timely, and fair so that all developers have an effective and predictable path to interoperability and are enabled to innovate,” the Commission added.
Reached for comment, Apple spokesman Julien Trosdorf emailed a statement in which the company wrote: “At Apple, we’re proud of the fact that we’ve built over 250,000 APIs that allow developers to build apps that access our operating system and functionalities in a way that ensures users’ privacy and security. To comply with the DMA, we’ve also created ways for apps in the European Union to request additional interoperability with iOS and iPadOS while protecting our users. Undermining the protections we’ve built over time would put European consumers at risk, giving bad actors more ways to access their devices and data. We will continue to work constructively with the European Commission on a path forward that both protects our EU users and clarifies the regulation.”
The Commission has six months to conclude this pair of proceedings after which it says it will send preliminary findings to Apple explaining the measures it is expected to take to “effectively comply” with the DMA’s interoperability obligation.
A summary of the EU’s findings will also be made public at that time.
The two new DMA proceedings on Apple do not imply the Commission has reached the end of the wider non-compliance proceeding still open on the company. So Apple could still face a DMA enforcement decision (and potential fine) down the line.
However, the EU is clearly looking for quick results for its flagship market contestability regulation. For that reason, the Commission is likely to be most keenly focused on finding ways to apply the new toolbox so the DMA can work at pace to reshape Apple’s compliance instead of landing a hefty penalty. But, clearly, having a big stick to encourage compliance helps.
The early opening of a DMA proceeding on Apple has helped the Commission dial up its interventions as it unlocked access to certain powers — such as these specification proceedings.
We have also already seen quite a lot of movement from Apple over its DMA offer. Changes the tech giant made to its original compliance proposal under Commission scrutiny include opening up web distribution for iOS apps and applying fewer restrictions on how developers can link out to cheaper offers outside the App Store, as well as tweaks to browser choice screens, among other revisions.
On the flip side, it has introduced a raft of new fees — and critics continue to complain its changes still haven’t gone far enough. So where all this ends up is still a moveable feast.
This report was updated with comment from Apple
Comment