Impacts of Dma on App Store Operations

The European tech landscape is set for a seismic shift with the introduction of the Digital Markets Act (DMA), and for developers, this is big news. The DMA, effective from March 2024, is reshaping the digital playing field, making it easier for developers to navigate the world of web stores, access vital ad performance data, and even create their own app stores. The European Commission's designation of gatekeepers (see image), including tech giants like Apple, Alphabet, Amazon, ByteDance, Meta, and Microsoft, is a pivotal moment in tech regulation. Here's what you need to know about how the DMA will impact app development: * App Stores: Google and Apple's app stores are in the spotlight. The DMA opens doors for developers, allowing them to link to web stores and offer a wide range of third-party payment options. This means more flexibility in driving traffic and conversions within web stores. * Operating Systems: The DMA also extends to operating systems, including Android, iOS, and Windows PC OS. Sideloading and third-party app stores will become a reality, creating new distribution opportunities. * Ad Services: Google, Meta, and Amazon's ad services will undergo changes too. Developers will gain access to more comprehensive data, improving their ad campaign performance. * Opportunities for Developers: With increased competition among app stores, developers can look forward to potentially better conditions, reduced fees, and improved discoverability. * Data Access: The DMA mandates gatekeepers to provide developers with real-time access to aggregated and non-aggregated data, including personal data. This opens up new possibilities for harnessing user data generated by gatekeepers. * Global Impact: The EU has a track record of setting tech regulation precedents. The DMA's influence is likely to extend beyond European borders, much like the GDPR did in the past. Developers who adapt to this new landscape in the EU will have an advantage in testing strategies for other markets as these regulations spread. * The Brussels Effect: Keep in mind that European tech legislation often paves the way for global regulatory trends, so we can expect DMA-style regulations to ripple across the globe in the coming years. Members of Liquid and Grit can find our full analysis in our most recent App Dev Digest. #TechRegulation #DigitalMarketsAct #TechInnovation #Developers #EURegulation #DigitalEconomy

Google was found guilty of violating anti-trust law on Monday in the Epic v. Google trial. Epic argued that Google used its control over the Play Store, as well as its influence, to suppress competition in the smartphone app store market. A jury agreed. Epic didn't seek monetary damages in the lawsuit -- instead, it seeks lower platform fees and more payment and distribution alternatives. The judge in the trial will determine the remedies next year. I question the impact on the app economy that a mandate to offer alternative app payments will have. Both Apple and Google have been forced to offer alternative in-app and off-platform payments in various jurisdictions; in all cases, they continue to extract a platform fee on those payments that renders their use financially impractical. For instance: in South Korea, where alternative app payments are required by law, Google and Apple continue to charge a fee on alternative payments -- discounted by a mere 4%. In the EU, in compliance with the DMA, Google will apply a 4% discount to its fee when the alternative payment is offered alongside Google's default option. When the default isn't offered, Google will apply a 3% discount. If the platforms are allowed to apply fees to alternative payments, those alternatives likely can't compete with the defaults: more checkout friction (adding a credit card), less trust, and, potentially, higher costs, given that the alternative payment methods must pay transaction costs in addition to the platform fees. My sense is that the default Google Play and App Store payment methods remain dominant unless the platforms are prevented from extracting fees on those payments. Engrained consumer habits and checkout friction are likely insurmountable when platforms can apply fees to alternative payments. Link in the first comment to my full analysis on the topic.

"The Digital Markets Act introduces rules for platforms that act as “gatekeepers” in the digital sector. These are platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their end users, and which enjoy, or will foreseeably enjoy, an entrenched and durable position. This can grant them the power to act as private rule-makers and to function as bottlenecks between businesses and end users.   The Digital Markets Act aims at preventing gatekeepers from imposing unfair conditions on businesses and end users and at ensuring the openness of important digital services. Examples of changes that gatekeepers will have to implement include ensuring end users can easily unsubscribe from core platform services or uninstall pre-installed core platform services, stopping the installation of software by default alongside the operating system, providing advertising performance data and ad pricing information, allowing developers to use alternative in-app payment systems or allowing end users to download alternative app stores."   — From: European Commission, Questions and Answers: Digital Markets Act: Ensuring fair and open digital markets, July 7, 2023 https://lnkd.in/etmXvkVM