Last week, a panel consisting of Craig Chapple, head of content at PocketGamer.biz, Archie Stonehill, head of product at Stash, Ryan Davis, head of performance marketing at Kwalee, and Igor Melniks, SVP business development at ZBD participated in a live webinar hosted by Clare Wimalasundera, associate director at Raptor PR.
The discussion focused on the EU’s Digital Markets Act, a new legislation with extensive powers aimed at regulating and monitoring major platform operators like Apple and Google.
The webinar delved into the details of the DMA, highlighting its potential impact on app developers in the EU in the upcoming months and years. It provided insights into the law’s nuances and highlighted aspects that have not yet received widespread attention.
Understanding the DMA and its implications:
“Rather than the government needing to prove that a law is being broken, here the gatekeepers need to prove that they’re doing everything right. That’s a huge difference to how traditional law works.” – Archie Stonehill, Stash
In essence, the DMA comprises a set of trading regulations that were enacted by the European Union nearly two years ago, with enforcement commencing on March 6th, 2024.
It’s important to note that the DMA operates at the EU level, similar to GDPR, and is enforced uniformly across the EU. The legislation comes with stringent intervention and penalties to ensure compliance from major platform operators, with the EU having the authority to levy fines of up to 20% of a corporation’s global revenue.
Archie Stonehill from Stash outlined the necessity for the DMA, citing the failure of traditional competition measures in the digital space. He emphasized that unlike traditional laws where the government proves a violation, under the DMA, gatekeepers must demonstrate compliance, shifting the burden of proof.
Designated gatekeepers like Apple and Google are required to adhere to the law’s provisions in all regions where they operate as platform owners or app store operators, prohibiting preferential treatment of their own products or engaging in anti-competitive practices.
The DMA has opened up app stores in three key ways:
1) Native in-app payments: App developers can now utilize payment processors other than the app store’s default provider, although challenges remain in achieving true freedom in this area.
2) App distribution: Developers now have the option to distribute their apps outside the platform’s official store, but practical implementation presents obstacles, with ongoing disputes likely.
3) Payment for goods and services: The DMA permits payments for products and services outside the app environment, enabling enhanced flexibility and innovation, as demonstrated by services like Spotify.
Apple’s response and the road ahead:
Apple’s initial response to the DMA required them to offer alternative terms for app and service distribution on iOS in Europe. This introduced a complex scenario for developers and publishers, requiring a decision between existing terms and new, less favorable conditions with added complexities like the Apple Core Technology Fee.
While some developers may benefit from the reduced commission and fee structure, others find the new terms prohibitive, necessitating careful evaluation and decision-making at the individual title level.
Despite these challenges, the panel believes that ongoing changes are likely, with more favorable terms anticipated in the future. Adjustments are expected, but the process of selecting the right agreement remains daunting for developers.
Potential for improvement and future outlook:
“These policies were quite clearly architected to be as far as they dared push it. Previously you couldn’t even opt out! Now you can opt out one time. But Apple even allowing you to download outside the app store? That’s pretty amazing.” – Archie Stonehill, Stash
The panel views the introduction of the DMA positively, expecting significant changes and improvements in the terms and conditions in the near future. While challenges persist, there is optimism that the legislation will lead to a more favorable environment for developers and publishers.
As the DMA continues to influence the digital landscape, opportunities for innovation and choice are emerging, with companies like Playtika already leveraging webstores for a significant portion of their business, demonstrating the potential benefits of navigating these regulatory changes effectively.
Ultimately, the panel believes that the DMA has the potential to drive positive transformation in the industry by promoting a fair and competitive environment. They anticipate further revisions to the terms and regulations, aiming for a more balanced ecosystem that benefits all stakeholders in the mobile games industry.
