Apple Inc.‘s (NASDAQ:AAPL) iPad operating system, iPadOS, has been labeled as a gatekeeper by the European Union’s antitrust regulators, according to the European Commission’s recent announcement.

What Happened: The decision comes under the Digital Markets Act (DMA), which was enforced this year. The DMA has already classified 22 services from tech giants like Apple, Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), and ByteDance as gatekeepers, controlling access to their platforms, Reuters reported on Monday.

The European Commission’s decision follows an investigation initiated in September last year. Apple’s iOS, Safari browser, and App Store were previously designated as gatekeepers.

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“Our market investigation showed that despite not meeting the thresholds, iPadOS constitutes an important gateway on which many companies rely to reach their customers,” said EU antitrust chief Margrethe Vestager.

The Commission noted that Apple’s business user numbers exceeded the quantitative threshold by eleven times, and its end user numbers were close to the threshold, with a predicted rise in the near future. Both business and end users are locked into iPadOS due to its large ecosystem.

Apple, which has six months to comply with the DMA, stated it would “continue to constructively engage with the European Commission to comply with the DMA across all designated services”. Non-compliance with the DMA could result in fines up to 10% of the company’s global annual turnover.

Why It Matters: This development comes on the heels of a tumultuous week for Apple, which saw a mix of exciting announcements and challenging news. Apple is set to launch a Calculator app for the iPad, a long-awaited feature by users. However, the company also experienced a significant drop in iPhone sales in China and had to cut its Vision Pro shipment forecasts due to decreased demand.

Earlier this month, Apple rolled out the first beta version of iOS 17.5, which allows users in the European Union to download apps directly from developer websites, in line with the DMA.

On Monday, Apple’s stock was trading at 2.57% higher in the pre-market at $173.65 at the time of writing, according to Benzinga Pro.

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