Europe & United Kingdom
The EU Parliament, United Kingdom, and individual European countries are all scrutinizing practices undermining choice and competition in the digital economy and tackling the control mobile operating systems operators have on their platforms.
Click on the blue squares to learn more about all the efforts to rein in these large tech platforms and open the app stores.
United Kingdom
The Competition and Markets Authority (CMA) launched its Market Study on Mobile Ecosystems in June 2021, and the final report — published in June 2022 — asserts there are substantial concerns about both Apple and Google’s respective app store-related practices and proposes remedies to address them.
The UK Government in April 2023, introduced the Digital Markets, Competition and Consumer Bill, which will empower the CMA’s Digital Market Unit (DMU) to enforce codes of conduct and other pro-competition interventions that will apply to companies with Significant Market Status, such as Apple and Google in relation to their app stores. The DMU will be on a statutory footing by Mid-2024. The Coalition for App Fairness supports the passage of this Bill and believes the Bill will give the DMU the ability to act quickly and effectively, and provide proportionate recourse for developers, consumers and SMS firms.
France
The Paris Commercial Court is expected to render a judgment in late 2022 against Apple following a lawsuit that was filed by a branch of the French Ministry of the Economy (the DGCCRF). In this lawsuit, the DGCCRF claimed that Apple leverages its position of economic strength vis-à-vis app developers to impose a series of unfair conditions on them, as well as an excessively high commission. This judgment will follow an earlier judgment of the Paris Commercial Court, which in March 2022, Apple had engaged in similar practices in breach of the French commercial code.
The European Union
The European Union adopted the Digital Markets Act (DMA) in July 2022, a regulation that seeks to promote contestability and fairness in digital markets. The DMA will lay down clear rules for digital gatekeepers, who are defined as companies that operate one or more “core platform services” (including the provision of app store services) and meet certain quantitative thresholds. The obligations contained in the DMA will stop these gatekeepers from imposing unfair conditions on business users and consumers. For example, under the DMA, mobile app market gatekeepers will no longer be able to force app developers to use their respective in-app payment systems – finally opening the app store marketplace to real, substantive competition. The DMA will also give the European Commission the power to carry out market investigations, update the obligations for gatekeepers when necessary, and sanction non-compliance. The DMA officially entered into force on November 1, 2022 and will now move into the implementation phase. Gatekeeper companies will be designated by September 6, 2023. The prohibitions and obligations become enforceable on March 6, 2024.
The European Commission (EC) is reportedly investigating Google’s Play Store rules. In July 2022, Google announced that it would allow non-gaming app developers to use alternative billing systems in the Play Store to process payments by users in the European Economic Area. Google also said that it would reduce the fees it charges to app developers by three percent — from 15 to 12 percent. The changes to its Play Store rules were intended to be a first step to comply with the DMA. However, the EC reportedly has concerns that these changes may not be sufficient.
Germany
The German Competition Authority (Bundeskartellamt or The German Federal Cartel Office, FCO) has initiated a proceeding against Apple based on the competition law rules for large digital companies. The initial investigation seeks to determine whether Apple is a company of “paramount importance across markets” under Section 19(a) of the German Competition Act, a designation Google has already received. According to the President of the FCO, the proceedings will be heavily focused on the operation of the App Store, specifically because it “enables Apple in many ways to influence the business activities of third parties.”
The Netherlands
The Netherlands Authority for Consumers and Markets (ACM) launched an investigation into abuse of dominance by Apple in its App Store, specific to dating applications, in April 2019. In late 2021, ACM required Apple to allow dating app developers on the Dutch App Store to use the in-app payment of their choice or to link to out-of-app payment options. Because Apple initially refused to comply with the ACM order, it was charged a weekly penalty of 5 million euros, with a cap of 50 million euros. In June 2022, after months of failing to meet the conditions of the ACM, Apple changed its conditions in a manner which is technically compliant, but remains unfeasible for developers in practice. As of May 2022, the Google Play Store rules are now also under investigation by the ACM.
United Kingdom
The Competition and Markets Authority (CMA) launched its Market Study on Mobile Ecosystems in June 2021, and the final report — published in June 2022 — asserts there are substantial concerns about both Apple and Google’s respective app store-related practices and proposes remedies to address them.
The CMA also initiated an investigation into Apple’s App Store policies on the ground that these practices may breach Section 2 of the UK Competition Act, which prohibits abuses of a dominant position. Similarly, the CMA launched an investigation into the Google Play Store’s requirement for app developers to use Google’s payment system, Google Play Billing, for IAP. These investigations are on-going.
The UK government has recommended the creation of a digital markets unit (DMU) within the CMA in order to adopt codes of conduct and other pro-competition interventions that will apply to companies with Significant Market Status, such as Apple and Google in relation to their app stores. The DMU will be able to start its work once the enabling legislation is adopted by the UK Parliament. A draft bill is expected to be put to Parliament by Spring 2023.
France
The Paris Commercial Court is expected to render a judgment in late 2022 against Apple following a lawsuit that was filed by a branch of the French Ministry of the Economy (the DGCCRF). In this lawsuit, the DGCCRF claimed that Apple leverages its position of economic strength vis-à-vis app developers to impose a series of unfair conditions on them, as well as an excessively high commission. This judgment will follow an earlier judgment of the Paris Commercial Court, which in March 2022, Apple had engaged in similar practices in breach of the French commercial code.
The European Union
The European Union adopted the Digital Markets Act (DMA) in July 2022, a regulation that seeks to promote contestability and fairness in digital markets. The DMA will lay down clear rules for digital gatekeepers, who are defined as companies that operate one or more “core platform services” (including the provision of app store services) and meet certain quantitative thresholds. The obligations contained in the DMA will stop these gatekeepers from imposing unfair conditions on business users and consumers. For example, under the DMA, mobile app market gatekeepers will no longer be able to force app developers to use their respective in-app payment systems – finally opening the app store marketplace to real, substantive competition. The DMA will also give the European Commission the power to carry out market investigations, update the obligations for gatekeepers when necessary, and sanction non-compliance. The DMA officially entered into force on November 1, 2022 and will now move into the implementation phase. Gatekeeper companies will be designated by September 6, 2023. The prohibitions and obligations become enforceable on March 6, 2024.
The European Commission (EC) is reportedly investigating Google’s Play Store rules. In July 2022, Google announced that it would allow non-gaming app developers to use alternative billing systems in the Play Store to process payments by users in the European Economic Area. Google also said that it would reduce the fees it charges to app developers by three percent — from 15 to 12 percent. The changes to its Play Store rules were intended to be a first step to comply with the DMA. However, the EC reportedly has concerns that these changes may not be sufficient.
The Netherlands
The Netherlands Authority for Consumers and Markets (ACM) launched an investigation into abuse of dominance by Apple in its App Store, specific to dating applications, in April 2019. In late 2021, ACM required Apple to allow dating app developers on the Dutch App Store to use the in-app payment of their choice or to link to out-of-app payment options. Because Apple initially refused to comply with the ACM order, it was charged a weekly penalty of 5 million euros, with a cap of 50 million euros. In June 2022, after months of failing to meet the conditions of the ACM, Apple changed its conditions in a manner which is technically compliant, but remains unfeasible for developers in practice. As of May 2022, the Google Play Store rules are now also under investigation by the ACM.
Germany
The German Competition Authority (Bundeskartellamt or The German Federal Cartel Office, FCO) has initiated a proceeding against Apple based on the competition law rules for large digital companies. The initial investigation seeks to determine whether Apple is a company of “paramount importance across markets” under Section 19(a) of the German Competition Act, a designation Google has already received. According to the President of the FCO, the proceedings will be heavily focused on the operation of the App Store, specifically because it “enables Apple in many ways to influence the business activities of third parties.”