The EU's Digital Markets Act forced Apple to crack open the iOS fortress. It required alternative app stores. It mandated sideloading. It seemed to promise disruption. And yet MacPaw's Setapp Mobile is shutting down on February 16th—a powerful reminder that regulation can force compliance but cannot force adoption. This marks a critical moment: policymakers learned that infrastructure mandates don't equal market transformation when ecosystem advantages are entrenched.

The inflection moment is deceptively simple: regulation forced the plumbing but couldn't force the traffic. MacPaw, the Ukrainian developer behind Setapp, posted the shutdown notice on a support page this week. The reason? "Still-evolving and complex business terms that don't fit Setapp's current business model." Translation: despite the EU's mandate, there weren't enough users, enough revenue, enough leverage to make the numbers work.

This is the real inflection point. When the European Union's Digital Markets Act went into effect last year, it fundamentally changed what Apple had to allow. Third-party app stores. Direct sideloading. Payment alternatives. The regulatory sledgehammer swung hard, and Apple had to comply. But compliance and adoption are different things entirely.

Setapp Mobile launched with promise—a subscription-based alternative store with curated apps, part of the broader ecosystem that the DMA was supposed to unlock. The company previewed it to press as a genuine contender in the newly fractured iOS market. But something happened between regulatory mandate and user adoption: nothing. Or rather, almost nothing.

The numbers don't lie, even if MacPaw isn't publishing them. A shutdown one year after launch, citing "complex business terms," is code for "we're hemorrhaging money and users won't switch." Nobody closes a new market opportunity if it's working. They close it when the business model that regulators forced them to build doesn't generate the usage or revenue to sustain operations.

This matters because it reveals something policymakers systematically underestimate: network effects and ecosystem lock-in are stronger than regulation. They always have been. Apple didn't spend years building iOS into a fortress because of paranoia. It built it because switching costs are astronomical. Users have years of payment methods stored, app purchases accumulated, iCloud data embedded. A regulatory mandate to open the door doesn't magically make users want to leave.

Investors who bet on DMA-driven disruption need to reconsider their thesis. The regulatory arbitrage play looked clean on paper: Brussels mandates competition, competitors move in, incumbents lose market share. But that's a mechanistic view of how markets actually work. Regulation can force infrastructure. It cannot force adoption. When competing against Apple's 20-year ecosystem moat, infrastructure alone is insufficient.

The European mobile market is now a testbed for this exact question. Other alternative stores remain: AltStore PAL is still operating, as is the Epic Games Store. But none of them have achieved significant scale relative to Apple's App Store. The reason isn't legal—the DMA removed that barrier. The reason is economic. Users don't see a compelling reason to migrate, friction remains high, and the incumbent's advantage persists even in a regulated market.

There's a precedent here, though it points in the opposite direction. Android proved that a genuine alternative platform could scale—but it did so because it was truly different, because OEMs had control of their hardware stack, and because the switching costs were lower by default (not every app purchased, not every piece of data locked away). iOS doesn't have that luxury for competitors within the walled garden. Even regulated, the walls remain standing.

For builders considering whether to invest in iOS alternative app store infrastructure, the signal from Setapp's shutdown is stark: the regulatory mandate opened the door, but the market isn't walking through it. For enterprises evaluating iOS's long-term competitive position, it's reassurance. For policymakers in Brussels—and potentially regulators elsewhere—it's a hard lesson about the limits of regulatory intervention when facing embedded ecosystem advantages.

The timing matters here too. This shutdown arrives as other jurisdictions—the UK, the US potentially—are considering similar regulations. The Setapp Mobile case will become a reference point in those conversations: proof that regulatory mandates cannot unilaterally break incumbent moats. It takes a genuine competitive product, not just a legal mandate, to shift user behavior at scale.

Setapp Mobile's shutdown validates a critical regulatory inflection: the Digital Markets Act can force compliance infrastructure but cannot mandate market adoption. For investors assessing regulatory-driven disruption plays, this is evidence that legal mandates and economic viability diverge sharply when ecosystem switching costs remain high. For builders, the signal is clear—alternative iOS app stores exist legally but remain economically marginal. For decision-makers, it reinforces iOS's structural resilience even in a regulated environment. Watch the next 18 months: if AltStore PAL and Epic Games Store iOS follow Setapp's path, we'll know the DMA's disruptive impact is fundamentally limited. If they survive and grow, the inflection will have merely been delayed, not negated.