Apple’s App Store monopoly is history. The EU has ruled and Apple has complied. Who won? As it turns out, this is the wrong question to ask. There is no winner. The question is more like ‘who lost’?

It’s a fascinating story about big power, big money, big egos and misguided objectives – with potential consequences for millions of users. The starting point is monopolies, which the EU – like most western governments – has declared illegal, or at least undesirable. Unless they – the politicians/bureaucrats – control the monopolies. 

The next – and current – level is regulation of big tech, because the old definition of monopolies don’t work well in the digital age. And – as is often the case – the intentions were good: Protecting the customers/users and ensuring that competition works and works fairly. Thus the DMA – EU’s Digital Markets Act, passed in 2022 – placed Apple’s App Store squarely in the crosshairs. Not the only target by far, but the most visible one and thus the one getting the most attention.

Regulation is always a delicate balance. Monopolies, including the modern variants like Apple’s ‘walled garden’, have important advantages. In this particular case, Apple protects customers and products by rigorous screening at the gates of the ‘garden’, which makes Apple’s ecosystem, as it is frequently referred to, more secure with better privacy protection than the competition. Loosening up would lessen control and almost by definition increase security breaches, hacking etc. Definitely not what we need.

The EU and other regulatory bodies have heard the arguments and decided that ‘opening up’ is the most important issue. Leaving Apple and other vendors no option but to comply. And comply Apple did, but in an unexpected way. While adhering to the letter of the DMA, Apple created new regimes and requirements that effectively blocks competing app stores by making them either too complicated, too expensive or both.

In the Medium.com article Looks like Apple just outsmarted the EU, writer Enrique Dans (recommended reading) summarizes the case like this:

This is a textbook case of what happens when politicians insist on meddling in things that work reasonably well, creating a situation that makes everybody unhappy without really solving the problem they intended to solve. Apple’s average market share in the smartphone market in the European Union varies between 15% and 31% (Q2, 2019 and Q4, 2020 respectively) with a peak of 56.22% in Sweden. The point here is that nobody had really complained about Apple’s ecosystem, other than a few companies simply seeking to make more money.

In other words, what the EU did ended up being worse than not doing anything at all – by demonstrating their own uselessness, even more so than in the GDPR case which we’ve discussed before (check out Why GDPR is a Bigger Problem Than Privacy). 

Like Enrique points out towards the end of his post:

The lesson here is that regulation is a very delicate tool and must be used carefully, particularly when it comes to companies with deep pockets and smart lawyers.

An old saying comes to mind: ‘If it ain’t broken, don’t fix it.’ The second takeaway for the EU bureaucrats is my favorite Tim O’Reilly quote: ‘Work on things that matter.’