Digital Markets Act
The European proposal for a Digital Markets Act (DMA) published on 15 December 2020 provides a strong basis for addressing persistent anti-competitive practices and ensuring fair and contestable digital markets in the European Union.
With a few large platforms currently acting as gatekeepers between businesses and their end-users, it is increasingly essential for the EU to act in a coordinated fashion to prevent these gatekeepers from engaging in unfair practices that undermine contestability — behaviours that lead directly to higher prices, lower quality, and less choice and innovation for European consumers. The European Commission’s proposal to ensure fair and open digital markets can prevent gatekeepers from enforcing monopolistic rules and behaviours to benefit all users and developers.
The DMA is a solid legislative proposal that could have far-reaching benefits for all users of the major app stores with some changes.The Coalition for App Fairness (CAF) welcomes the opportunity to work with the members of the European Parliament and national governments to achieve a strong, clear version of the DMA that puts the needs of European consumers and businesses first.
The DMA expands protections for developers and users from gatekeepers’ many unfair, anti-competitive behaviours.
The DMA proposal reflects many of CAF’s App Store Principles that promote a level playing field for app stores, developers, and consumers. CAF applauds all these new protections:
- The DMA requires that all gatekeepers allow other app stores on their platforms. This means that Apple will no longer be able to force all developers and consumers to use the App Store to get software on their iOS devices. For the first time, there will be real competition for the App Store.
- The DMA prohibits gatekeepers from requiring developers to use core platform services. This specifically covers proprietary single sign-on services (e.g. Sign In With Apple) and may cover gatekeeper-owned payment processors (e.g. Apple’s In-App Purchasing service).
- The DMA requires that all developers get the same access as gatekeepers to platform-specific hardware and software features (such as UWB and location information data).
- The DMA requires that every developer who meets “fair and non-discriminatory” requirements have access to gatekeeper platforms, regardless of business model.
- The DMA prohibits gatekeepers from using a developer’s own data, as collected through using the platform, to compete with the developer.
- The DMA ensures that developers can communicate with their customers about deals they might be interested in.
- The DMA ensures that gatekeepers cannot remove or ban apps on their platform that compete with apps made by the gatekeeper.
- The DMA addresses specific self-preferencing activities, such as banning gatekeepers from ranking their own apps more favorably than competitors and allowing users to uninstall a gatekeeper’s pre-installed apps.
Additional amendments are needed to further address anti-competitive practices from gatekeepers.
While CAF is pleased with early drafts of the DMA proposal, various articles should be amended to further address anti-competitive gatekeeper practices:
- Currently, gatekeepers require developers to use their payment processing systems in order to access the app stores. To address this practice, the DMA should add clear language that prevents gatekeepers from making usage of a specific payment processor a condition for platform access. Further, the DMA should prohibit the gatekeeper from making access to any of its core platform services conditional on the developer or the end-user subscribing to or registering with any other service offered by the gatekeeper.
- While the DMA clearly reflects a belief that no app can be removed from a platform if it competes with a gatekeeper app, that language does not exist in the current draft of the DMA. If that is an intended goal — to stop gatekeepers from eliminating competition with their own apps on their platforms — then the DMA should say so explicitly.
- The DMA should expand its language on what kinds of communications are allowed between developers and their customers. Limiting this communication to just “deals” is not enough to cover basic customer support and many other essential functions.
- In confronting the rampant self-preferencing gatekeepers engage in, the DMA seeks to ban specific behaviours — a critical component of addressing anti-competitive practices. However, since “self-preferencing” can be an amorphous term, CAF suggests expanding and further clarifying what the European Commission means by this, and include additional provisions such as allowing users to choose their default apps, prohibiting gatekeepers from unreasonably pushing users to revert to their own apps, and banning biasing algorithms that give gatekeepers unfair advantage.