The other day, many technology media literally thundered the news – the European Union adopted two new laws that regulate the activities of large technology companies. The news says that these two laws will have far-reaching consequences for large corporations such as Apple and Google. In particular, they will have to allow installation of applications by users from third-party directories.

But the influence of these two laws is actually wider than one might think. Let’s see what they mean for the industry. We understand under the cut.

EU officials adopted two important laws at once. These are the Digital Services Act (DSA) and the Digital Markets Act (DMA). Both of them are a kind of set of rules that are binding on those online platforms on which work, leisure and, in fact, the comfortable existence of users depend. Attention is given, first of all, to those companies on which tens of millions of users depend in one way or another.

The laws will soon be enacted throughout the EU, including those companies that are not based in this region. In general, lawmakers are trying to influence many companies, but we all understand who is the target in the first place – it’s Apple, Google, and some other corporations from the US and other countries.

The bureaucracy in the European Union is quite well developed, which implies a negative connotation. Months or even years are sometimes required to coordinate important documents, and it is not at all a fact that such documents do not end up being shelved. But with regard to the two new laws, it can be said that they were simply not allowed to be forgotten and abyss. They first became known in December 2020, since then several EU officials have been actively working to improve and implement new legislative initiatives.

Now there remains a small formality – both documents will have to go through the procedure of approval by the Council of the European Union and publication in the Official Journal of the EU. But this is just a formality – there is no doubt that the laws will come into force. Well, they come into force 20 days after publication. So it’s somewhere in the fall of 2022.

As mentioned above, we are talking not only and not so much about Apple and Google, but about all large corporations from different industries of the digital segment – from hosting and providers to online marketplaces and online platforms. Since it is Google and Apple that are on everyone’s lips, then we are talking about them in the first place.

In the statement of the authors of the initiativeit says that large platforms should refrain from promoting their own interests (sounds unusual for big business, right?), they are required to share data with representatives of other industries, and also make it possible for users to work with more application catalogs than now. The authors of the laws tried to formulate in a few lines what corporations can do and what they should not do in any case.

Let’s deal with Apple and Google for now

The situation is most interesting in relation to these two companies, since they own the two largest catalogs of applications for mobile devices. Companies have repeatedly tried to defend the rules they have introduced, which have been opposed by both ordinary users and companies.

But now it seems that corporations will have to accept – one of the provisions of the laws adopted in the EU directly says that the owners of application directories need to open up the possibility for users to install software from third-party sites. In addition, companies are required by law to open up the ability to easily remove pre-installed applications or change their settings. Developers should be given the opportunity to use their own payment systems.

The last point was probably influenced by the trial of Epic Games with Apple. The latter filed a lawsuit because Epic Games violated the agreement with Apple and added a way to pay for subscriptions to the Fortnite game for iOS, bypassing the rules of the app store. The US court ruled that the game company is obliged to pay Apple in the amount of 30% of all previously received income. There is, however, one “but” – at the same time, the court forbade Apple to restrict the actions of application developers of its own catalog.

Thus, the company has lost the right to unilaterally prohibit users from using different payment methods for both the application and for in-app purchases, except for the App Store. Accordingly, the court gave permission to developers to use special elements or links within applications to inform users about alternative payment methods.

Now Apple and Google have banned blocking payments through third-party systems in order to receive a commission on all transactions in the amount of 30%. So it’s safe to say that then, in 2021, Apple won the battle but lost the war.


What else?

The adopted laws introduce the concept of “intermediary” (Eng. Gatekeeper, but in the current context it is clearly not a “gatekeeper”, but an “intermediary”). This category is assigned to a company that:

• Has a “strong economic position” and “important influence” on the EU internal market.
• Has a “strong intermediary position”, namely, it connects users and a large number of partners.
• Already has or will have in the near future a “strong and strong position in the market”, namely, meeting the first two points for at least three years in a row.

As soon as the laws come into force, as mentioned above, this will happen in the fall of 2022, the European Commission is going to conduct an analysis of the largest companies. In the course of this work, the corporations will be asked for the necessary data in order to establish who can be called an “intermediary”. After assigning the appropriate category, the company will have six months to bring its activities in line with the new standards. If the company tries in any way to avoid this, it faces a fine of up to 10% of its annual turnover, and not European, but global. And this is only for the first violation, for the second you will have to pay 20%. And this is serious for a company of any size.

Here are some of the most illustrative provisions of the laws adopted in the EU:

• Companies are required to allow users to install third-party applications or app stores in order to operate or interact with the applicable platform.
• Users should be able to uninstall pre-installed applications, as well as change the default settings in both the OS and browsers, if these settings are created by “intermediaries” in order for the user to use the products and services of such a company.
• Companies are required to allow companies that use their platforms to promote and sell products in the external market and enter into agreements outside the platforms.
• Companies should never force developers to use only “middleman” services.

As far as one can understand, Jailbreak will no longer be useful after the entry into force of EU laws – in fact, EU officials have introduced this term, or rather, what it means, into the legal field. Except for some nuances, of course.

And yes, it’s an important point. Finally, the target audience of “intermediaries” and their products cannot be children. And ad settings can’t include settings for audiences with different nationalities, sexual orientations, or political views. Violation is fraught with a fine of up to 6% of the company’s global turnover.

Actually, all these provisions apply not only to Apple and Google, but also to other companies, so in the near future it will be possible to find out who fell under the law and what consequences this will have on such companies.