The European Commission declared iPadOS a gatekeeper under the Digital Markets Act (DMA). This means that stricter rules can now be imposed on the platform.
This decision follows the commission’s designation of Apple as a gatekeeper for iOS, Safari, and the App Store on September 5, 2023.
The Commission thoroughly investigated iPadOS to determine its role as a gateway for businesses to reach end users, despite not meeting the quantitative thresholds specified in the DMA.
The investigation revealed that Apple’s business user number exceeded the DMA’s quantitative threshold significantly. It also highlighted how end users are effectively locked into iPadOS due to Apple’s extensive ecosystem and strategies that discourage switching to other tablet operating systems.
“Apple leverages its large ecosystem to disincentivise end users from switching to other operating systems for tablets,” the Commission said.
Furthermore, business users face a lock-in situation with iPadOS, driven by its large and commercially attractive user base, particularly in sectors like gaming apps.
“Business users are locked in to iPadOS because of its large and commercially attractive user base and its importance for certain use cases, such as gaming apps,” the Commission explained further.
As a result of these discoveries, the Commission determined that iPadOS functions as a critical link for business users to reach end users, and Apple has established a robust and deeply rooted position in this aspect. Therefore, Apple has been granted a six-month timeframe to guarantee complete adherence to DMA obligations related to iPadOS.
With this designation, Apple must ensure that iPadOS abides by DMA rules, including allowing for third-party apps to be sideloaded, third-party payment options, and no preference for self-owned products.
“We will continue to constructively engage with the European Commission to comply with the DMA across all designated services. Our focus will remain on delivering the very best products and services to our European customers while mitigating the new privacy and data security risks the DMA poses for our users,” Apple told TechCrunch.
The EU opened non-compliance investigations against Alphabet, Apple, and Meta. The Commission has also received potential DMA thresholds from Booking, ByteDance, and X, indicating ongoing scrutiny and regulatory actions in the digital market space.
The Commission has also confirmed that this investigation is the first one to be conducted to evaluate the qualitative threshold.
“Today, we conclude the first market investigation for qualitative designation under the DMA, finding that iPadOS is also an important gateway for businesses to reach consumers. Apple has now six months to comply with the DMA obligations,” said Thierry Breton, Commissioner for Internal Market.
In January 2024, Meta began rolling out DMA-compliant options across its platforms.
Update [02/05/24]
Apple announced on May 2 that it will apply its recently introduced core technology fee (CTF) to iPadOS apps downloaded from the App Store. The CTF, initially set at 50 euro cents per user account per year, affects major app developers, even if they don’t use Apple’s payment services or the App Store. Notably, the first 1 million user accounts are exempt from this fee.
Additionally, Apple has introduced a tiered approach to the CTF. Small developers with less than 10 million euros in global annual business revenue will either pay no CTF or a capped fee during a three-year period. Students, hobbyists, and developers creating free apps without monetization will not be charged the CTF.
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