Tag Archives: european union

8 January 2023
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Business, Devices, Security

DMA or how Apple can lose its power on a digital market

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EU Parliament's key committee adopts Digital Markets Act – EURACTIV.com

In 2023, European Union will be facing big changes. One of those is a new legislation proposed by European Commission back in 2020, which would change the flow of competition on the digital market. DMA or Digital Market Act was signed in late 2022 and is aimed to create fairer competition and containment of the possible domination on the market with tech giants.

This regulation is especially interesting when it comes to Apple Inc.

The company has been facing criticisms all the time through their existence. It was usually related to the gadgets itself, operating systems, as well as the criticism from app developers.

The last one, is the crucial when it comes to the discussion about DMA. App developers are dissatisfied with the fact that Apple controls everything when it comes to downloading apps and third-party softwares’. In addition, the company has set 30% fee for them, which gradually decreases and threatens revenues.

In terms of the implementation of DMA, it was the biggest change of the governing laws’ in more than 2 decades, and it creates a huge threat for Apple’s control of its closed and secure operating system (IOS).

The DMA not only requires opening up the possibility to download app from different external sources, but also to allow the developers to install third-party payment systems. Nowadays, if the app provides its customers with so-called IAP (in-app purchase), Apple takes 15-30% as the commission, and as it was said by chief execute of the company Tim Cook, such system does not suit in terms of DMA, however, coming up with a new idea would create a mess.

It is more interesting to consider what will Apple do, what they will have to create and/or change to fit the regulation.

The company is widely known as lawyers seekers, so it is expected that they will not only challenge DMA by trying to interpret what seeping laws entails, but also through direct confrontation between the European Commission and Apple over the implementation of the rules.

What else can Apple do?

Firstly, apps that provide banking or pick-up services, that currently does now pay any fees can be forced to do this, as well as the c0mpany can cut their inside fees to become even attractive to the developers. 

This move would lead big companies that left Apple Store, for instance, Spotify, to come back, not offering their current way of paying for the subscription via the website. As this can result to high traffic without any significant impact on the revenue.

This is going to be spectacular to see how companies will be changing aiming to fit in the new legislations, as those are considered to be huge changes not only for European Union as a whole, but also the companies that would like to compete even with such tech giants as Apple.

To read more about DMA: https://www.euronews.com/next/2022/11/02/eus-digital-markets-act-comes-into-force-what-is-it-and-what-does-it-mean-for-big-tech

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23 November 2022
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European Union rewrites the rules of the internet

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For many years now, smaller companies had a hard time competing with the massive tech giants owning the market, so the European lawmakers decided that it’s time for a change, and time to make it easier for small companies to grow.

On the November 1st, the new European Union law – called Digital Market Act (DMA) – came to life, forcing the leading firms such as Apple, Google and Meta to be more open and to let other companies connect with their products more easily. The DMA will bring major changes to what people can do with their devices when it comes to apps from different sources. The new director of the EU office in San Francisco, George de Graaf says “If you have an iPhone, you should be able to download apps not just from the App Store but from other app stores or from the internet”.

Persoon met vergrootglas kijkt naar de Digital Markets Act

The general goal of the DMA is to define when a large online platfrom qualifies as a “gatekeeper” and take appropiate action. Big companies whose position can grant them the power of making their own rules, and thus creating a bottleneck in digital economy are qualified as such “gatekeepers”. To overcome this situation, the DMA defines a set of rules that these companies have to follow, or face being fined up to 10% of the company’s worlwide turnover or even 20% when it comes to reapeted violations.

What will be the actual benefits of the DMA? First of all, it will prevent big companies from favoring their own products and allow smaller companies to grow. It will eliminate unfair prevention of installing apps from other sources, thus allowing users for more variety. In addition, users will have an option to choose their default browser or the voice assistant of their choice. Additionaly, the gatekeepers will have to share the data that they have collected with other business users and they won’t be able to track consumer activity for targeted advertising without users’ consent.

The DMA moved into implementation phase now and it will start to apply in six months. The companies are expected to comply with the requirements in mid-2024

Personally, I think that the rules of DMA are a little bit harsh, big companies like Apple or Google worked for many years to achieve their success and it’s understandable that they want to show off their accomplishments. European Union wants to expand the market but giving away the data collected by gatekeepers and reducing their position on the market isn’t the right choice. My other concern would be the safety of our devices. For example, Apple for many years has been very active in monitoring the apps that are being uploaded to App Store, in contrary to Google Play, where you can find some apps that don’t look particularly safe.

Digital Markets Act summed up in a YouTube video:

References:

https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6423

https://www.wired.com/story/europe-dma-prepares-to-rewrite-the-rules-of-the-internet/

https://www.vpngids.nl/privacy/wetgeving/digital-market-act/

https://www.euronews.com/next/2022/11/02/eus-digital-markets-act-comes-into-force-what-is-it-and-what-does-it-mean-for-big-tech

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1 December 2015
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eCommerce Certificates

Reading Time: 4 minutesFor years, decades we have been going online to purchase, music, electronics, books and literally anything you can imagine. We should be quite familiar with shopping online, however, in this so familiar environment, trust is still an issue, if not, the issue in the e-commerce sphere.

I will be looking at the German and Polish e-commerce market. One of the most developed e-commerce market in the EU and Poland, the fastest growing e-commerce market in the EU. Both markets full of opportunities. What can the Polish market learn from the more developed and established e-commerce market in Germany? A lot, but let’s look at the issue of trust that I mentioned earlier.

A representative study sponsored by the D21 Initiative and the “Federation of German E-commerce and Mail-Order-Companies” reveals that 96% of people questioned already ordered something online. Furthermore, customers prefer shops that have been rated by other users positively, the companies are based in Germany, they are certified shops and customers do not have to pay in advance. Another interesting fact, 47% of people that have never purchased online before or rarely said that the fear of misuse of their private data is the reason why they have not made purchases online.

All these facts point towards one issue – trust. Trust is the conversion rate booster and literally the only thing that stops your users from becoming loyal customers. Trust is a rather complex construction of the human mind, usually established over longer periods of time and repetitive interaction between the parties involved. However, this will not work for first time customers. Providing excellent service and constant communication with your existing customers will help to build a loyal customer base, users that have not been customers previously will need some extra convincing to make their initial purchase in your shop.

How do we convince these potential clients that we are a trustworthy shop with excellent customer service and an uncomplicated and well-designed customer experience? First things first, the e-shop itself should be clearly structured, transparent and the order process should be as easy and uncomplicated as possible. There is a variety of elements to look at, starting with product presentation, pricing, legal representation of the shop, contact center, customer data required and last but not least an FAQ and terms of service section. Interesting fact, only about 30% of German online buyers claim to not read the “AGB” or terms of service, which is usually a very long and boring document written in legal German. This shows once again, people want to be assured that in case things go south, they are safe and backed by a legal framework and they can deal with a “real” company, with an office, hopefully located in the same country.

Customers at this point are looking to build a trustworthy picture of a shop themselves; the shop has to just facilitate that process. Let the customer find what he is looking for, offer a world-class return policy and easy shipping. Certificates like “Trusted Shops” and SSL security can help to build the image of a safe shopping environment.

Certificates as trust builder

ts-trustmark_220

Certificates like Trusted Shops try to offer a guarantee for the reliability and trustworthiness of shops. People do actually look for this kind of reference on a webpage in order to build trust. A trusted shop and SSL certificate are therefore highly recommended and relatively affordable in their implementation.
Even though trusted shops tries to provide a European certificate, I think there is still room for improvement. The European E-Commerce and Mail Order Trade Association (EMOTA) is working on an own certificate, however, personally, I see here a lot of room for improvement and a stronger image and reputation, as well as higher level of recognition are required to give these certificates the desired effect. Internationalization of e-commerce seems to be still developing, as customers are highly suspicious of foreign companies on the e-commerce market. Even though, we imagine the internet as borderless space. This is especially challenging for foreign E-commerce shops that would like to enter e.g. the German market.
This is also a call out to European law makers to facilitate the development in e-commerce and provide a truly international e-commerce marketplace with a common set of rules, regulations and customer protection acts.

What does this mean for the Polish Market?

 

The Polish e-commerce market is not mature yet, which provides a lot of opportunities for e-commerce, as well as supporting functions like Logistics to benefit of the developments in the fastest growing e-commerce market in Europe. Trust is in fact a major issue in Poland, since there is still a large amount of the population unfamiliar with e-shops or even the internet in general. The market will have to educate and build trust to the customer. Certificates are not as widely spread and do not have the recognition, even though trusted shops entered the Polish market a while ago. As a lot of people are not online yet, especially in the older demographics, it is crucial to use a combination of online and offline tools to give people a feeling of trust in companies that do not have a physical shop. E-commerce leaders are so far almost without exception a combination of online and brick-and-mortar stores. This will certainly be one of the biggest challenges for the Polish e-commerce market in the future.

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