On Monday, April 29, 2024, the European Commission announced that it had designated Apple as a ‘gatekeeper’ under the Digital Markets Act (DMA) in relation to iPadOS, the operating system for the tech giant's tablets.
What is the DMA?
The European Union’s DMA defines and designates which tech giants act as gatekeepers.
It does so by defining a specific set of criteria that qualify big digital platforms as gatekeepers and by taking steps to ensure they behave fairly in the market.
The act aims to establish fairer business environments for dependent businesses, boost opportunities for tech start-ups and innovators, and offer consumers more choices.
What is a gatekeeper?
A so-called gatekeeper is a company that has a strong economic and intermediation position in the EU market, which has proven itself durable over a longer period of time.
According to The Verge, the specific criteria for defining a company as a gatekeeper include the company having an annual EU revenue of at least €7.5 billion in each of the last three years, or an average market cap of €75 billion in the last year. Furthermore, it must offer its platform to at least three EU member states, and maintain a core platform with at least 45 million monthly active users and 10,000 yearly active business users in the EU, also over the last three years.
Why is iPadOS allegedly gatekeeping?
On September 5, 2023, the Commission designated its first six gatekeepers, covering 22 core platforms: Alphabet (the company behind Google), Amazon, Apple, ByteDance (the company behind TikTok), Meta, and Microsoft.
Included in those 22 platforms was Apple’s iOS, its Safari-browser, and its App Store. The iPadOS was not immediately included as it did not meet the quantitative threshold of the DMA.
Nevertheless, the Commission opened an investigation into the platform to determine whether or not it was an important gateway for business users to reach end users and therefore should be designated as a gatekeeper, resulting in this week’s conclusion.
“Our market investigation showed that despite not meeting the thresholds, iPadOS constitutes an important gateway on which many companies rely to reach their customers,” explains Executive Vice-President in charge of competition policy Margrethe Vestager in a statement released by the Commission.
Apple now has six months to comply with the DMA regulations for iPadOS, failing which it could face significant fines.