Many of the apps we use daily — to improve fitness, find local events, track expenses, and so much more — are created by innovative solo developers or small app-development teams. Thanks to platforms like Google Play and the Apple App Store, it’s incredibly easy for these developers to reach a global audience. For as little as $25, they can create a developer account, access powerful tools and software kits, and get their app in front of millions of potential customers in just a few days.
In Europe, however, the Digital Markets Act (DMA) threatens small developers and innovation by undermining those platforms, making it harder to create new apps, reach customers, and succeed.
What is the Digital Markets Act?
Passed by the European Union (EU) in 2022, the DMA targets large, mostly US-based digital platforms—including Google, Apple, Amazon, and Meta—by restricting key product and service integrations. The restrictions might make it easier for a handful of European companies that are not covered by the DMA to find success, but they will harm developers and consumers.
How the DMA Hurts Developers — And Undermines Consumer Safety
Leading tech companies like Google and Apple offer developers affordable access to the digital platforms and tools they need to build, maintain, troubleshoot, market, and sell their apps to customers worldwide. Critically, these companies also vet apps to make sure they’re functional and free of malware, and ensure the security of user data and payments. Last year, for example, Google rejected 2.36 million apps from its app store because they didn’t meet its standards, and blocked over 35 million dangerous installations. Leading app stores’ established reliability means billions of consumers confidently download millions of apps every year.
The DMA disrupts that reliability, requiring leading platforms to permit link-outs to third-party sites and largely unrestricted sideloading — i.e., downloading apps from outside the stores — thus bypassing their vetting and security checks. This creates serious security concerns: Over 95 percent of malicious Android apps are introduced through sideloading. DMA rules make users more likely to encounter scams, data breaches, or malware. And because consumers may believe that Google or Apple vetted and approved these bad actors, their trust in the ecosystem will likely be eroded, reducing app downloads and hurting small developers most.
Most worryingly, the DMA is likely to splinter the app ecosystem and return it to its early days, where every carrier and device manufacturer has their own operating systems and app stores. Indeed, it aims to do so. That’s bad news for developers. Instead of building two versions of their apps to sell in two trusted platforms, they’ll have to build multiple versions for multiple platforms—each with its own coding and technical requirements, review processes, and terms of service—just to reach the same number of customers they currently do. This may be manageable for big app developers like gaming or entertainment companies. However, small developers lack the time, money, and resources to create multiple versions of their products or hire new developers to do so. That’ll leave them with fewer customers and/or less time to focus on building new and better products. The DMA’s requirements will likely overwhelm small, innovative app developers, making it even harder for them to compete with large software companies.
Conclusion
U.S. regulators should pay careful attention to Europe’s missteps. So far, the DMA appears to be changing the app ecosystem in ways that hurt both developers and consumers, and cause broader economic damage. A recent study found the DMA could cost European businesses as much as €114 billion in annual lost revenue—or up to €1,122 per worker per year—because it disrupts the digital platforms and tools businesses rely on.
Yet prominent U.S. efforts—like the DOJ’s attempt to break up Google, and legislation like the App Store Freedom Act and the Open Apps Market Act—aim to replicate the EU’s regulatory approach. Instead, why not learn from Europe’s mistakes? Rather than breaking the industry-leading platforms and tools that empower small developers and other entrepreneurs, U.S. leadership should focus on policies that foster innovation, choice, and competition, strengthen the digital and broader economy, and promote ongoing U.S. tech leadership.
