December 8, 2023
EU Bill Forcing Apple to Allow Side Loading Expected to Pass Easily [Analyst]

EU Bill Forcing Apple to Allow Side Loading Expected to Pass Easily [Analyst]

Posted March 18, 2022 at 4:25am by iClarified · 4935 views
The EU's Digital Markets Act, which has provisions that would force Apple to allow side loading and third party payments, is "expected to pass easily", according to Evercore analyst Amit Daryanani.

Sideloading would give users the ability to install apps of their choosing on the iPhone, circumventing Apple as the gatekeeper of what is and isn't allowed. Apple has long insisted that this will compromise the privacy and security of the iPhone, neglecting to address why that isn't the case for macOS.

In a research note to clients, Daryanani says the final language of the bill will likely to be agreed upon this month, followed by a vote in 2-3 months. The bill could take effect by early next year.

It's suggested that the impact from side loading will be minimal...

The impact from side loading will likely be minimal and we expect the App Store to remain the main avenue for app discovery as its unlikely consumers will be interested in this more complex method of downloading an app. There are also significant security concerns with side loading which may give Apple some flexibility in how they implement.

Third party payment systems are a bigger concern for the company as customers could circumvent the 30% fee Apple charges. Daryanani notes that Apple could use legal action and willful non-compliance, as it's doing in the Netherlands to combat this legislation. The EU has already taken notice of this.

The impact of this legislation will depend on consumer response, magnitude of the enforcement mechanism and what does AAPL charge to the App developers if they use an alternative payment. Apple has thus far been willing to use both legal action (South Korea) and willful non-compliance (Netherlands) to combat this type of legislation.

The EU reportedly plans to charge a non-compliance fine of 10% of annual revenue.

Apple could also get hit with antitrust legislation in America where the Senate Judiciary Committee has moved forward the bi-partisan 'Open Markets Act' that would also require Apple to allow sideloading.

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[via Ped30]

EU Bill Forcing Apple to Allow Side Loading Expected to Pass Easily [Analyst]
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