Frostbite: the DMA survives its first hard winter

As the saying goes, there are decades where nothing happens and weeks where decades happen. Since Donald Trump returned to the White House, the pace of change has been extraordinary, especially in the app economy. This month, the EU will celebrate the one year anniversary of its flagship digital antitrust legislation, the Digital Markets Act (DMA). Designed to break up the monopolies enjoyed by the likes of Apple, Google, Amazon, Meta, and others, it’s allowed disrupters and smaller platforms to flourish. But now, with Trump threatening to retaliate against Europe for penalizing these US giants, all this is at risk—or so it seems. As I detail below, in February the EU took a tough stance on threats emanating from Washington. Indeed, as these headlines demonstrate, the crackdown on Silicon Valley is as fierce as ever. Let’s take a look.?

The Apprentice: Trump learns the hard way

The big news in February was that, after months of hot air, the 47th US President finally made good on his threats. On February 22, Trump signed a memorandum promising to defend US companies against the “extortion” of the DMA—and its analogs in non-EU nations—ordering the US Tax Representative to review its effects on American businesses. Subsequently, the US House Judiciary asked the EU to explain how fair the DMA is on US companies.?

None of this is surprising. Earlier in February, a bellicose US Vice President JD Vance warned that this would happen. Despite this, Europe isn’t bowing to pressure. Prior to Trump’s announcement, the EU insisted that it is “fully committed” to DMA enforcement. What’s more, on top of defending DMA fines, EU chiefs are refusing to delay Apple’s antitrust investigation too.?

For anyone working in the app economy on this side of the pond, things are… unsettled. But the EU’s tough stance is encouraging. Ultimately, this is a battle worth fighting, and one that’s immensely reasonable. Even in the US, Google is fighting a second antitrust case, and is waiting to find out the penalty of the first. Indeed, as BNN Bloomberg suggests, things aren’t looking much better for the other big Silicon Valley players there either. As such, it’s only right that the EU holds US companies to the same standards.

Apple Turns Sour

Dark clouds are gathering over Apple’s headquarters in California. After being forced, under DMA rules, to allow third party app stores on iOS, it has now had to allow the first porn app onto iOS: Hot Tub, accessible via AltStore PAL.

Since the app allegedly doesn’t have age restrictions, the iPhone manufacturer is justifiably very unhappy about this development. “We are deeply concerned about the safety risks that hardcore porn apps of this type create for EU users, especially kids,” Apple said.

Subsequently, Epic Games CEO Tim Sweeney, whose company has invested in Alt Store, fired back at Apple, criticising its monopolistic practices.?“[W]hen Apple are allowed to be the gatekeeper of competing apps and stores, they grossly misuse that power to disadvantage competition," he said.?

Who’s right? Maybe they’re both wrong. While porn apps without age restrictions shouldn’t be allowed anywhere, there are ways of policing these things without e.g. imposing costly developer fees and blocking third party app stores—both of which were the case on iOS prior to the DMA.?

Elsewhere this month, Apple’s drama continued. First, a German MEP demanded that the DMA’s rules should be applied to Apple’s Cloud and AI services. Then Spotify claimed that Apple still isn’t DMA-compliant. Then China launched an investigation into the company over its developer fees. And finally, the UK government is—worryingly—demanding access to iOS user data. So overall, a mixed bag for Apple. And none of it good.?

Google’s Judgement Day Arrives

While writing this month’s blog, I came across a typically provocative headline suggesting that the DMA has been?an “utter failure”. Well, if that’s the case, then I’d like to see what constitutes a success. Since it was launched almost a year ago, the DMA has made history over and over again—and February was no exception. As Reuters reported, Google is now set to be fined for breaching the DMA’s rules as part of a landmark judgement.

Since last March, Google has been under investigation in the EU for favoring its vertical search engines (e.g. Google Shopping, Google Flights, and Google Hotels) over rivals, thereby discriminating against third-party services.?And as the New York Post reports, although the EU competition watchdog has yet to comment, the fine is likely, as per the DMA’s rules, to be up to 10% of Google’s global revenue.

Change?doesn’t happen overnight—and neither do EU investigations. But 12 months on from the DMA’s launch, and it feels things are indeed changing for the app economy. Indeed, watching these videos from the Pocket Gamer conference in London in January, in which several gaming CEOs celebrated the DMA’s impact, only confirms that we’re headed in the right direction.

Once again, that’s all from me. I’ll be back next month to celebrate the DMA’s first birthday!

—Robert.