Apple Faces New Hurdle: After iOS, EU Now Identifies iPadOS as Digital Gatekeeper

The European Commission on Monday announced that iPadOS, Apple’s operating system for iPad has been identified as a significant digital gatekeeper under the EU’s new tech rules. These new guidelines carry strict requirements to promote fair business competition and expand options for consumers.

In September 2023, the European Commission classified Apple’s iOS, Safari web browser, and App Store as gatekeepers. On the same day, the Commission initiated a market investigation to examine whether iPadOS also plays an important gateway for business users to reach end users.

Now, the investigation has ended. The Commission’s investigation believes that Apple “presents the features of a gatekeeper in relation to iPadOS,”, according to an EC press release shared on Monday. This statement has been released on the following grounds:

• Apple’s business user numbers exceeded the quantitative threshold elevenfold, while its end user numbers were close to the threshold and are predicted to rise in the near future.
• End users are locked-in to iPadOS. Apple leverages its large ecosystem to disincentivize end users from switching to other operating systems for tablets.
• Business users are locked into iPadOS because of its large and commercially attractive user base, and its importance for certain use cases, such as gaming apps.

Now, Apple has a six-month deadline to make necessary changes to iPadOS so that it fully complies with the Digital Markets Act (DMA). Now, that means Apple has to follow the same loop as it did with iOS. We all know Apple has made some major changes in iOS and App Store policies in the past few months. And, all of them were DMA-inspired changes.

So, we might expect the enforced iOS changes like the support for third-party app stores, the ability to uninstall Safari entirely, and other major changes to come to iPadOS in a forthcoming update.

” Our market investigation showed that despite not meeting the thresholds, iPadOS constitutes an important gateway on which many companies rely to reach their customers. Today’s decision will ensure that fairness and contestability are preserved also on this platform, in addition to the 22 other services we designated last September. Apple has six months to make iPadOS compliant with the DMA.” – Margrethe Vestager, Executive Vice-President in charge of competition policy

There’s a criteria to be classified as a “gatekeeper” under the Digital Markets Act. This includes at least €7.5 billion of sales across the EU or a market capitalization of €75 billion or above. It also requires services or platforms to boast a monthly active user base exceeding 45 million and attract over 10,000 active business users annually within the European Union.

It’s worth knowing that Apple, Alphabet, Amazon, ByteDance, Microsoft, and Meta were all designated gatekeepers by the Commission. Just like Apple, these global brands had to adhere to all DMA obligations by March 7.

Now, Apple can also choose not to comply with the new regulations. That said, it has to pay some huge, damn huge compensations for DMA breaches. This includes regular EU investigations, massive fines, and the imposition of “behavioral or structural remedies.”

Talking about the compensation amount, it can be as much as up to 10 percent of a company’s global revenue. With repeated violations, the fine can go all the way up to 20 percent. Considering Apple’s total annual turnover, this amount equates to tens of billions.

Well, it seems Apple is all trapped by the European Union, and it has to make all the required changes to keep breathing. In the coming months, we might see some really big changes in iPad’s operating system as well. We’ll keep you updated as Apple unfolds everything.