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Apple's Unforced Regulatory Error

The term "unforced error," originating from tennis, aptly describes Apple's recent blunder. It signifies a mistake made without the opponent's direct influence. This concept perfectly encapsulates Apple's decision to initially kick off, then later reinstate, Epic Games from its Developer Program amid Epic's plans to introduce a competing app store tailored for the EU's Digital Markets Act (DMA).

The DMA aims to dismantle digital monopolies, compelling Apple to make unwelcome concessions while just barely meet its requirements. Yet, the prospect of competing app stores truly challenging Apple's dominance remains slim. Market structures, coupled with stringent conditions like payment models and intellectual property (IP) 'license' costs linked to launching apps on alternative platforms, significantly diminish their ultimate potential.

Epic Games, creators of the popular game Fortnite, appeared as a viable candidate to pioneer an alternate app store. Despite previously being kicked off The App Store, Epic's substantial intellectual property and consumer appeal, particularly among younger audiences, made it one of the few possible competitors. Nevertheless, Apple's initial decision to ban Epic, allegedly in response to criticism from Epic's CEO, Tim Sweeney, regarding Apple's policies, was ill-advised. This move, although later reversed, was not well-received amid increasing scrutiny from regulatory bodies like the EU/EC and, to some extent, the US Congress, which are currently less tolerant of Big Tech and its gatekeeping practices.

All in all, Apple's flip-flop, while rectified, could inflict more damage than anticipated. The incident not only showcases Apple's sensitivity but also highlights its erratic enforcement of rules while drawing unwanted attention from the EU. In the future, we may see Apple's standing as a digital gatekeeper face significant challenges. The long-term consequences of this unforced error are unknown, but the episode is proof of Apple's vulnerability to regulatory scrutiny.



Tags: Apple DMA