The European Union has given the green signal for a new set of rules that it expects will limit the dominance of the mega-cap technology names.
What it could mean for Apple Inc
EU wants the “Digital Markets Act” that could weigh on profitability of the tech giants, including Apple Inc (NASDAQ: AAPL), in place by October of 2022. This morning on “Squawk Box”, CNBC’s Steve Kovach said:
In Apple’s case, the Digital Markets Act means allowing the user to install software from the internet directly to your phone. And Apple tells me, hey, that’s a huge security risk. We need to work through that.
Together with pushing Apple into enabling users to switch to other payment methods, the new regulation could significantly hurt Apple’s profit from its App Store.
A core change to how big tech works
The new legislation is a huge deal as it essentially outlaws many practices that make up the very core of the technology business. Kovach added:
These are such big changes that they’ll have to do it globally. Back in 2018, when the privacy law went in the EU, they had to change their apps and websites. I can see that happening here as these are such fundamental changes to the way these big tech platforms work.
The news comes only days after “The Block” said Apple had bought the British fintech startup Credit Kudos.
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