Will the EU 'Digital Markets Act' Change the App Market Landscape?

[Image source=Pixabay]

[Asia Economy Reporter Oh Su-yeon] The European Union (EU) version of the Google antitrust law, the 'Digital Markets Act (DMA),' is set to be enforced in May this year. Amid the ongoing global trend of regulating big tech, attention is focused on changes in the app market industry dominated by Google and Apple.

The EU Digital Markets Act defines companies that restrict the choices of business participants and end users as 'gatekeepers' and aims to prevent the abuse of their dominance. The law applies to platform companies that meet certain criteria, such as market capitalization, revenue size within the European Economic Area, and monthly users within the EU. Google and Apple are representative companies subject to this law.

Once the Digital Markets Act is enforced, it is expected that users will have more service options, and accessibility and pricing will improve. The same applies to app markets. The DMA specifies obligations and prohibitions for gatekeeper companies. Obligations include allowing interoperability between third-party services and gatekeeper platforms. Prohibitions include ▲banning the prioritization of gatekeepers' own services ▲banning the prevention of linking to external platforms ▲banning the setting that prevents removal of pre-installed non-essential software. Based on this, if Google and Apple's abuse of market dominance is restricted, competition in the app market can be revitalized.

Bloomberg reported last month that Apple is considering allowing 'side loading' (installing apps without going through its own app market). Analysts say Apple's policy change is influenced by the enforcement of the Digital Markets Act. Once the DMA is enacted, Apple, which only allows operation of the App Store, will be subject to regulation.

If interoperability with third-party services is allowed, Apple, which has not permitted third-party app markets citing security reasons, will lose its justification. Significant changes in app market share are also expected. In particular, the domestic app market is likely to see a shift as One Store, which competes with Apple for second place in market share, will be able to enter iOS. Since iOS has rarely offered benefits such as discounts or coupons, users who enjoy spending may move to One Store. From a game company's perspective, this means access to the user pool that One Store has, as well as reduced commission burdens, potentially increasing sales.

Domestically, the monopoly practices of global app markets are also being monitored. This is included in the government's cross-ministerial 'Digital Platform Development Plan for Innovation and Fairness' announced last month. The plan aims to prevent unfair competition practices such as app markets abusing market dominance to restrict the use of competing platforms. To prevent user harm and protect rights, the Fair Trade Commission and the Korea Communications Commission will conduct investigations into app market operations. They will also work on legislation to correct competition-restricting behaviors of app markets, such as limiting multi-homing (using competing platforms) that can prevent abuse of market dominance.

This content was produced with the assistance of AI translation services.