Understanding the Impact of the Digital Markets Act on Mobile Game Developers

The European Union's Digital Markets Act, passed in November 2022, aims to rebalance the digital landscape by introducing new regulations for digital platforms. As the effects of the Act begin to take shape, it is essential to understand what this means for the games and interactive entertainment industry. The Digital Markets Act is a new regulatory framework that builds upon existing competition law rules in the EU, with the primary goal of ensuring fairness and contestability in digital markets. This is achieved by curbing the power of a select group of digital platforms, known as "gatekeepers," through a prescriptive rulebook targeting their core platform services. To date, seven companies have been designated as gatekeepers, including Google, Amazon, Apple, and Microsoft, with a total of 24 core platform services. The Act's rules are backed by significant fining powers for non-compliance, with penalties of up to 10% of a firm's global turnover. One of the most immediate impacts of the Digital Markets Act is likely to be in mobile gaming, particularly with regards to the distribution of mobile games. The Act requires mobile gatekeepers to allow developers to build alternative app marketplaces and distribute their games via sideloading or third-party marketplaces. For instance, Apple is now permitting rival routes to download apps on iOS devices, challenging its proprietary App Store. In contrast, Google's mobile ecosystem has historically been more open, allowing the sideloading of games and the presence of alternative app stores. The Act also introduces the concept of fair and reasonable access to app stores, requiring mobile gatekeepers to provide fair, reasonable, and non-discriminatory general conditions of access to their app stores. This includes a published document outlining the terms and conditions, as well as a dispute resolution mechanism. Furthermore, the Act provides significant opportunities and flexibility in how game developers can offer and purchase content and services on mobile devices. Mobile gatekeepers must allow developers to inform their users about offers available outside of the gatekeeper's ecosystem and facilitate the completion of those transactions. Additionally, gatekeepers must permit gamers to access content, subscriptions, and other services purchased out-of-app within the relevant app on their devices. The Act also bans mobile gatekeepers from tying developers' access to their app store or operating system with requirements to process in-app payments through their proprietary billing system. This opens up the possibility for developers to use alternative, potentially cheaper billing options for in-app purchases. A key aspect of the Digital Markets Act is providing greater control and protection for mobile gamers and game developers over their data. Gatekeepers are forbidden from using non-public information obtained from developers to compete against them. The Act also introduces the concept of data portability, allowing gamers to request the transfer of saved data in their games onto a different ecosystem. Both Apple and Google have introduced new functionality and APIs to facilitate gamers' ability to port their own data. The Act requires gatekeepers to provide game developers with more useful data insights and analytics on how end users use their apps, free of charge. To comply, Apple has introduced a new App Store Connect API, while Google has expanded the analytics available to developers on its Play Console. The Digital Markets Act also seeks to impact the early stages of a game's development lifecycle by providing new technical opportunities for game development. Mobile gatekeepers must provide game developers with free-of-charge, effective interoperability with, and access to, the same operating system, hardware, or software features that are available to, or used by, that gatekeeper. This aims to ensure that mobile game developers can create games that are fully integrated into the gatekeepers' operating system, resulting in a better gaming experience for the end user. The Act also requires mobile gatekeepers to remove policies that force developers to build web experiences on their devices using the gatekeeper's proprietary browser engine. The European Commission designed the Digital Markets Act as a one-stop-shop rule for gatekeepers, with national regulators' enforcement in Member States barred wherever a core platform service has been designated. However, some national competition authorities, such as the German Federal Cartel Office, are proactively seeking to drive their own enforcement of digital platforms. The German framework is more flexible than the Digital Markets Act and allows the Federal Cartel Office to prohibit specific behaviors to designated companies. The UK has also introduced its own platform regulation, the Digital Markets, Competition and Consumers Act, which will introduce a new Strategic Market Status Regime. The regime will give the UK's Competition and Markets Authority the power to write firm-specific Codes of Conduct and take pro-competition interventions. While the rules that will affect the games and interactive entertainment industry are unlikely to start applying until the second half of 2025, the Digital Markets Act remains a hot topic in mobile gaming. The sweeping changes aim to put the controller into the hands of gamers and mobile developers alike, with new payment options, third-party app distribution, and greater control over data becoming present realities.