The European Union will apply key market fairness and contestability rules to Apple's iPadOS, the Commission announced today. This expands the number of Apple-owned platforms regulated under the Digital Markets Act (DMA) to four and increases regulatory risks for the tech giant. Expanding the tablet ecosystem.
Apple has six months to make sure iPadOS is DMA compliant.
The development could mark a major change in the way it operates its tablet platform in the EU, as Apple must comply with a series of DMA obligations, including prohibiting so-called “gatekeepers” from favoring their own preferences. Services and requirements that allow support for third-party app stores, app sideloading, and third-party payment options.
Apple must also open access to non-WebKit versions of Safari on iPadOS within the next six months, as it has already done on iOS in other DMA compliance phases. Business users who reach customers through tablet platforms have a legal right to FRAND (fair, reasonable and non-discriminatory) terms.
Last fall, the committee made Apple's mobile platforms – iOS, the App Store and the Safari browser – the subject of the DMA's dictionary of “dos and don'ts.” The scheme includes stringent penalties for any violations (up to 10% of global annual turnover). or more in case of repeat offenses).
Since then, Apple has announced a series of changes to how its platform operates in the region. However, some aspects of the response to the DMA are already under formal investigation due to suspected non-compliance. The commission began the first phase of its formal DMA investigation last month.
Apple's tablet operating system was not included in the EU's first DMA designation last year because its number of users did not meet the criteria. However, the rule gives the Commission room to consider qualitative criteria when big tech companies have established and durable positions. This is exactly what happened here.
In announcing its market findings, the committee said business users of iPadOS exceeded the baseline by 11 times, and that the number of end users was “close” to the baseline and expected to increase in the near future.
Our research also shows that both end users and business users are “locked in” on using iPadOS. “Apple leverages its large ecosystem to discourage end users from switching to other operating systems for tablets,” he wrote. “Business users are tied to iPadOS because of its large and commercially attractive user base and its importance for specific use cases, such as gaming apps.”
“[D]Despite not meeting the quantitative criteria stipulated in the DMA, [iPadOS] They constitute an important gateway through which business users can access end users and should therefore be designated as gatekeepers,” the committee added.
Apple responded to the iPadOS designation with an emailed statement: “We will continue to work constructively with the European Commission to ensure compliance with the DMA across all designated services. “We will continue to focus on providing the best products and services to our European customers, while mitigating the new privacy and data security risks DMA poses to our users,” the company wrote.
The committee allowed 12 months to conduct market research on iPadOS. Assuming that the EU began its review immediately after announcing the first DMA designation, it took the EU approximately eight months to finalize its qualitative review of the tablet platform. The Committee found that this was the first and, to date, only market survey since the DMA was established and operated.
In a previous decision last February, the EU decided not to target Apple's iMessage for DMA. This means Apple shirked its obligation to make its messaging systems interoperable.