WhatsApp will soon have to work with other chat services in the EU, and Apple will let iPhone users download apps from other providers’ stores. It is still unclear how strong the effect of the DMA law will be.
A new era of more competition for digital offerings is set to begin in the EU on March 7th: Large platforms must adapt to the rules of the DMA (Digital Markets Act).
What is the idea of DMA?
The law is intended to ensure more competition in digital services and better opportunities for new rivals. The basic assumption is that some large platform operators have become so powerful that they can cement their market position. The DMA should break this rigidity with rules for the so-called “gatekeepers”.
Which companies and services are affected?
The EU Commission has so far identified 22 “gatekeeper” services from six companies. Not surprisingly, these include the US heavyweights Apple, Amazon, Microsoft, Google parent Alphabet and the Facebook group Meta. The video app TikTok from the Bytedance company, which originally comes from China, was also added to the list.
What do you notice as a user?
Two DMA editions stand out. Meta’s WhatsApp chat service, which is popular in Germany, is to be opened up to other services – and Apple must for the first time allow apps from sources other than the in-house App Store to be installed on the iPhone. However: While WhatsApp has to create access, competing services such as Signal and Threema do not want to network at all. And with Apple’s regulation for other download platforms, it is unclear how many developers will agree to it – or whether they would prefer to just stay in the company’s App Store as before.
How does WhatsApp want to implement interoperability?
Messages from other services should end up in a separate area. This should make it clear that other security standards could apply to the messages, WhatsApp manager Dick Brouwer told Wired magazine. WhatsApp uses Signal’s encryption technology – and this makes networking with other services that also use it easier. However, other reliable encryption protocols will also be supported.
Why don’t other services want to join in?
Signal points out that the service goes beyond protecting content: “We have developed novel techniques to also encrypt sensitive metadata such as profile names and photos, contact lists, group memberships and information about who is sending messages to whom.” Other major apps “didn’t come close to meeting Signal’s privacy standards.” At Threema it was said that WhatsApp specifies all the protocols, “and we do not know for sure what happens to the user data when it is transferred to WhatsApp, especially since WhatsApp is not open source”. There are also unresolved problems such as addressing, since WhatsApp uses the phone number and Threema uses a randomly generated ID. This could potentially deanonymize Threema users.
How is this supposed to work with other app stores on the iPhone?
App developers can either leave everything as it was and only sell their applications via Apple’s App Store, as before, with a levy of 15 or 30 percent of the proceeds from digital goods and subscriptions – or they can make use of the new options. Then different conditions apply to them. For applications that you sell through Apple’s App Store, the levy drops to 10 and 17 percent respectively – plus a further 3 percent if you use the group’s billing system. New is a “core technology levy” of 50 cents for the first installation of an app in a twelve-month period, which is due after one million downloads. For apps that are sold through other marketplaces, Apple should only get them. If developers switch to the new model, there is no going back.
Do app providers want to get involved?
The gaming company Epic Games, whose “Fortnite” app was banned from Apple’s App Store after violating the rules, wants to bring its own download platform to the iPhone. The app marketplace Setapp, which allows applications to be used in a subscription model, also plans to launch in April. At the same time, the music streaming market leader Spotify – and also Epic – criticize the new rules harshly. Spotify manager Avery Gardiner, who is responsible for competition, says Apple’s implementation “doesn’t even come close” to meeting the DMA requirements.
Where do critics see problems?
From Spotify’s perspective, the switch to a new fee structure and the “core technology levy”, among other things, contradict the DMA. Spotify is one of the larger services (around one percent of app providers according to Apple’s calculations) for which the “core technology levy” would be due. And it could really hit the bank: Because it wouldn’t just have to be paid for by currently active users. Even if someone only has the app unused on their iPhone, it costs Spotify 50 cents for the first automatic update in a twelve-month period. Epic and Spotify, among others, criticize Apple for designing the new taxes in such a way that it is not attractive or affordable for developers to sell their apps through other stores.
How does Apple feel about the DMA requirements?
The group already insisted in the DMA run-up to the fact that selling apps only via the in-house store was the better solution for users: this way they could be better protected against data theft and fraud. The company also now emphasizes that it sees apps from other sources as a potential security risk that must be contained. Therefore, they will also be checked to see whether they contain any false information about their functions. Authorities and some companies demanded assurances from Apple that they could stop app downloads from other marketplaces.
Who decides whether “gatekeepers” meet the DMA requirements?
The EU Commission, among other things, with the help of market investigations. Violations face penalties of up to 10 percent of annual sales – and up to 20 percent in the case of repeated violations. The last option is to break up the property. In the end, courts could decide on possible punishments.