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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
How far should regulators go in dictating the basic designs of some of the most widely used tech products and services? The adoption of the EU’s Digital Markets Act, which came into force this week, amounts to a giant experiment in government micromanagement of everything from Apple’s App Store to the Google search engine and Meta’s Facebook and Instagram services.
To comply with the act, which aims to open up the most commonly used tech platforms and force greater user choice, the big tech companies have come up with a barrage of technical changes that they say will meet the new rules. It is now up to European regulators to comb through these and — where necessary — force further changes.
The magnitude of this undertaking is hard to overstate. Previous competition cases, such as the EU’s complaint against Google over comparison shopping, took years to resolve as the two sides haggled over technical solutions. That involved one small feature of Google’s search engine. The DMA, by contrast, has taken on the entirety of some of the most prominent digital services in use today.
In Silicon Valley, this has been met with deep apprehension. It is seen as a government attempt to override years of design and technical decisions made by product managers and engineers. Greater user choice may sound fine in theory, they argue, but it will challenge fundamental aspects of how services work.
To some extent, this reflects special pleading by the tech companies. Their products were designed partly with the self-interested aim of maximising their own revenue in the first place, so forcing them to go back to the drawing board may be the only way to increase competition. But that doesn’t lessen the potential impact.
For Apple, giving users a choice of app stores and payment providers on iOS means unpicking a wide array of technical linkages between services, as well as publishing 600 new application programming interfaces, or programming “hooks”, to give developers extra access to its mobile platform.
Steven Sinofsky, a former top Microsoft executive who as head of Windows lived through an earlier Brussels challenge to a big tech company, says this will lead to technical compromises that will make no one happy. All tech products involve trade-offs, he says. In Apple’s case, that meant making a decision early on about whether to prioritise security and privacy on the iPhone, or allow greater openness to outside services. For the regulators to now say they want what amounts to an option three — something that has all the security as well as all the choice — is to ask for the unobtainable, he adds.
According to Apple, a number of government agencies in Europe, particularly those involved in defence and banking, have already asked for assurances that they will be able to prevent their workers from downloading apps outside Apple’s own App Store — a sign some security-conscious customers are apprehensive about the risks.
For Google, meanwhile, complying with the DMA means downplaying some of its own “vertical” search features — such as its flight search box — and directing users instead to other intermediaries, like travel sites and comparison shopping engines. Often, for users, that will mean an extra step in reaching a final result.
This leaves the tech companies in an unenviable position, complaining that the DMA weakens the security of their products or degrades their customer experience, while at the same time trying not to undermine their own sales proposition. The new Apple marketing pitch, to judge by its detailed analysis of the impact of the DMA: Our products in Europe aren’t as good as they were, but at least they’re still better than all the rest.
How much benefit users will see in terms of extra choice is still an open question. One result of the DMA will be a proliferation of choice screens and consent boxes — things that present users with options about things such as which browser they want to use. Many users are likely to pass over them with little thought. Remedies like these, adopted at a much earlier stage, might have prevented the tech giants establishing such a dominant position in the first place but now that they are already entrenched, they seem unlikely to go far enough.
This is only the opening shot in the EU’s sweeping attempt to prise open the big tech platforms. Where it will ultimately lead, as the regulators dig into basic designs of some of the most familiar tech products and services, is hard to judge. It is likely to be a long, gruelling battle.
