How Europe can force Apple to support competition

Exclusive The results of the European Commission's inquiry into Apple's response to the continent's competition rules are expected to surface soon - and reports indicate the regulators are less than enamored with Cook & Co.

In anticipation of the findings and what they may mean for Apple, Open Web Advocacy (OWA) - an international developer-focused group set up to get politicians up-to-date on technical details - today will issue its assessment of Apple's compliance proposal, with recommendations for how the iBiz might meet its legal obligations.

A draft copy of the OWA report, provided to The Register ahead of time, claims Apple has failed to comply with the DMA, and has done so in ways that make life as painful as possible for competitors.

"Apple is using every tool at its disposal to dissuade developers from leaving their app store and to undermine the goals of the DMA," argues the report, which spans more than 100 pages.

On January 25, Apple announced how it intends to change its business practices and rules to meet the requirements of Europe's recently enacted competition law, the Digital Markets Act (DMA).

Under the DMA last year, the European Commission designated six dominant gatekeepers - Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft - and required these corporations to make changes to their products, services, and business practices to promote competition.

"The DMA aims at preventing gatekeepers from imposing unfair conditions on businesses and end users and at ensuring the openness of important digital services," the commission explained.

In the case of Apple, the DMA has taken aim at the rules Apple imposes, through its App Store Guidelines and its various developer agreements, on third-party developers for iOS and other platforms - including limitations on payment processing, app distribution, browser engines, sales commissions, and so on.

Those rules have forbidden, among other things, the use of any browser engine other than WebKit in iOS browsers.

For Google and rivals offering Chromium-based browsers, and for Mozilla with Firefox, the requirement that all iOS browsers implement WebKit - the technical foundation of Apple's Safari - precludes the possibility of competitive differentiation. There is no meaningful browser competition within the iOS ecosystem, because every browser is more or less Safari.

What's more, Apple's browser rule has limited the capabilities available to web apps that might otherwise be able to compete with native iOS apps - a situation that benefits Apple financially due to its control of the native iOS app distribution channel, the App Store. Google's payments to Apple to remain the default search engine for Safari.

Apple's concessions [PDF], articulated with the arrival of the DMA compliance deadline on March 7 failed to impress critics, who have accused Cupertino of malicious compliance. The iPhone maker announced support for third-party app stores, a browser choice screen, alternative payment mechanisms, and alternative web browser engines in the EU, among other things.

Unimpressed, the European Commission opened a non-compliance investigation into Apple. The OWA report is being made available under the hope that the commission will demand further changes from Apple.

The Register asked Apple to comment on that possibility, with absolutely no expectation of a reply.

Apple's main argument, the report asserts, has been that only Cupertino can be trusted to vet the apps and browsers available on iOS devices - a claim the UK's Competition and Markets Authority found wanting when it considered the issue.

The report cites the CMA's finding: "Overall, the evidence we have received to date does not suggest that Apple's WebKit restriction allows for quicker and more effective response to security threats for dedicated browser apps on iOS."

It also points to the CMA's interpretation of the incentives for Apple's behavior: "Apple receives significant revenue from Google by setting Google Search as the default search engine on Safari, and therefore benefits financially from high usage of Safari. ... The WebKit restriction may help to entrench this position by limiting the scope for other browsers on iOS to differentiate themselves from Safari."

As noted last year, Apple is believed to receive between $18 billion and $20 billion from Google annually to set Google Search as the default search engine in Safari, according to financial firm Bernstein.

The OWA report asks the commission to open proceedings against Apple and to investigate what the group alleges is "severe and deliberate non-compliance."

Its lengthy set of recommendations include:

"We urge the commission to enforce the DMA and obligate Apple to allow browsers and web apps to compete fairly and effectively on their mobile ecosystem," the report declares.

"This will unlock contestability, fairness and interoperability. Companies will then have to compete for users on merit, not via lock-in or control over operating systems. Consumers will benefit from choice, better quality and cheaper software, interoperability, and the genuine ability to multihome across devices and operating systems offered by different companies."

OWA is not the only advocacy group underwhelmed by Apple's response to the DMA.

The Free Software Foundation Europe (FSFE) would like to see the DMA interpreted more broadly to ensure Device Neutrality. In April the organization published a report [PDF] on the subject.

Lucas Lasota, legal program manager for The Free Software Foundation Europe, told The Register that the group took exception to Apple's requirement that developers submit their apps to Apple to be "notarized," even if not distributed through the App Store.

Notarization - originally offered as a way to vet macOS apps distributed outside the App Store - has been extended to iOS for alternative distribution scenarios. It consists of a set of automated checks that aspire to check the validity of developer signatures, to catch malware, and ensure compliance with various requirements.

"Regarding our Apple report to EC, if I could summarize one key takeaway for you is the problematic concept of 'notarization' that Apple is promoting as a legit condition to be imposed on developers, and we are of the opinion such 'notarization' is absolutely not compliant with DMA," argued Lasota.

"For Apple, 'notarization' actually means ingestion, processing and further bundle distribution of apps through App Store Connect (ASC) and encrypted with Apple's proprietary DRM. In other words: complete and unlimited control over distribution of apps in iOS. This is a no-go for Free Software, as it creates an encrypted barrier to access source code of apps."

Basically, OWA and FSFE contend that Apple should make iOS devices to function more like general purpose computers running a variety of operating systems. But as OWA observes, the estimated $20 billion that Apple receives from Google annually is "an amount so significant that it's unlikely Apple would willingly enable competition unless compelled.

"By standing firm against Apple's malicious compliance and forcing them to comply with their obligations under the Act as intended, the commission can improve interoperability, contestability, and fairness leading to lower priced and higher quality apps - not only for the EU but for the entire world," the OWA report concludes. ®

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