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EU Reportedly Planning to Charge Apple for Violating Digital Markets Act
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You misspelled “Apple”
It's about bloody time ASML charge a commission on Apple's sales revenue!
Can't expect to use that European technology and engineering for free or a lowly one-time fee.
Once you control so much computing that no one can compete with your product and you can unilaterally charge prices in important markets, you deserve (and will) get regulated. Because computing services purpose in business and society.
Oh, and also, you're denying other upstart entrepreneurs to compete with you.
👉 When someone in Sweden has engineering and marketing skills and starts building and providing a better music streaming service than you, through all their blood, sweat, hard work and sacrifice, they deserve to (be able to) compete with you.
Fairly. and yes, that includes pricing/costs as well. And no, it shouldn't require spending billions on developing and manufacturing their own phones. They don't deserve to be shut out by a phone manufacturer/operating system developer/software application store that controls the market in a duopoly.
I believe the way these things work is that Apple is still liable for fines while the case is adjudicated, and they may even accumulate interest.
Of course, if the court decision says the fines were never owed, there’s nothing to pay.
There's legal finding to the contrary.
I know, you'll claim that they can still be found in violation while believing they did nothing wrong.
They don’t get free rides. They add value to the App Store. Outside the App Store, they add zero value. Hence, they need to pay in other ways.
Also, Apple used THEIR OWN MONEY to create the App Store and the platform. Again, a government has no business telling a private entity how they should structure their fees, unless there are no other options. It’s not a monopoly. Get a different smartphone if you don’t like it. It’s called free choice.
And that's why the EU shouldn't tell them how to make business, or how much to charge developers and what concessions to make for third parties. You just said it yourself: they don't qualify as a monopolistic necessity, service or product to be regulated. Sure, they need components/materials regulation to avoid the devices catching fire, or causing cancer by touching them or being near them, etc., as well as fiscal compliance. But private management policies?
I don't see it as "poor Apple" but more like "poor private sector in general" and I've said it before: it's worrisome how the EU is trying to over regulate private businesses under the "protect the customer" flag, especially foreign investments. If you take a real good look, none of these regulations have anything to do with consumer protection or benefit. They are protecting specific EU companies, without actually making them work towards their own innovations.
Telling a foreign private company how its relationship with other companies should be, and how much of their infrastructure and investments they want that company to effectively concede to their EU competition is ludicrous. And now, add the failure to comply will result in fees calculated over their global income. Logic and reason at its finest.
So do Spotify, Netflix and the dating apps.
When you add value, you should have negotiating power. Apple (due to its platform monopoly and duopoly with Google) is in a position to deny them that - that's why the government steps in.
A government should have that business when competition doesn't play.
And they did not tell Apple how to structure their fees - until they came up with that "Core technology fee" to maintain their existing, anticompetitive business model. That's why Apple may face the government needing to tell them.
It is a monopoly once I've bought and set up an iOS device.
I can't get my apps elsewhere.
Smartphones aren't covered by the legislation.
There's only two relevant operating systems and App Stores that have all the apps - and they have suspiciously similar fee structure and terms. Or as it's otherwise called colluding duopolists.
They qualify as it almost as much as phone/cellular networks or electric power.
Apple isn't a foreign company - they serve the EU market through EU subsidiaries.
And it's far from ludicrous or an EU thing. It happens all around the world. Just ask Huawei.
They absolutely do.
If the consumer can download apps or (easily and comfortably) subscribe to music subscriptions elsewhere - from more than one store/payment provider - that benefits consumers.
When consumers can manage their digital subscription in-app and Spotify, Netflix & co. can do payment processing in it for a single-digit percentage rather than Apple's 30%, that will benefit consumers in competitive markets.
PS: Oh, and with regards to the inevitable "managing all subscriptions in a single place" and having a "mediator" in between in case of disputes: I agree, that's a consumer benefit. Yet I'm sure app developers / streaming service providers have no qualms about paying Apple a fair share and competitive commission for their payment/transaction processing.
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They are more like residential light switches to an electric power network.
Then why apply a fee using their global income?
Thousands of banks and transport operating companies (business customers) around the world depend on mobile apps to communicate with and sell to their customers. And they (have to) do it with apps on exactly two stores and platforms.
It's not like there's a duopoly in manufacturing or sales of residential light switches and all those business customers would depend on them.
Fee? What fee?
That doesn't benefit the consumer. It benefits the ones that want an alternative store and payment methods freeloading on Apple's hardware and tools.
Benefit for the consumer would be to let them install apps directly from the developer's website, like Macs. No need for alternative stores, payment methods or Apple's stores. Why aren't they pushing for that? That has never been the target. These laws are being written for EU companies to copy Apple's app store business models, reap benefits and pay Apple's IP licenses for dirt cheap.
They want to use their global income to calculate a penalty fee should Apple not comply with their DMA.
"Apple could face non-compliance fines of up to 5% of its average daily worldwide revenue, which is currently just over $1 billion, according to the report."
We have been down this road to the tune of a more than a hundred posts.
Those types of businesses depend on custom made hardware, communications and software solutions (my brother works developing for a very large company that combines both) and many even prohibit their employees to use off the counter iOS and Android smartphones and app store apps for business tasks.
Did you miss Apple announcing just that?
The DMA does.
You don't believe Apple followed up from allowing apps to be downloaded and installed from websites ("sideloading") out of the goodness of its hearts, do you?
I'd call that a fine, not a fee.
But to answer the question (why): Maybe because it sounds better (more reasonable) than 30% or 50% of local revenue?
I agree calculating fees on global revenue seems unreasonable and overreaching, when the underlying legislation doesn't apply globally.
But the thing is: 👉 I just don't care.
Given how Apple has been trying (though not at all unexpectedly for me)
- to restrict, limit and dictate developers, down to fineprint, wording and links in their apps
- to circumvent the legislation and its intended "spirit" (that is spelled out and not difficult to comprehend)
- spreading FUD about software installation
I just don't care anymore.
Apple has behaved and been acting so evil in regards to their app store business, that I just don't care anymore.
I'm fine with any calculation of fines. As long as it really hurts them when they wilfully refuse to comply.
It does though. The consumer could potentially find a better price elsewhere, like finding a better deal on shoes at Foot Locker versus Amazon and the brand's DTC website. If you don't shop around, that's a personal choice.
Those are also consumers; shocker, I know. Apple offers a software distribution service called the App Store. While yes, they should get paid for providing that service, a developer should have the right to choose an alternative method of distribution. As of now that is not the case (outside of Europe).
If Microsoft decreed that "Software can only come from the MS Store!" this forum would riot, and be cheering for the inevitable government intervention.
I'm not talking about their internal systems and processes.
Banks communicate with their customers and identify them through their apps.
Consumers use apps to make payments.
I'm not so sure. They may take it as some form of vindication of Apple's business model.
Or hope that consumers will change to macOS and that it would improve software availability on that.
That said, I suggest we start here. And why wouldn't Microsoft deserve a "core technology fee" and/or share of all subscription revenue for those apps?
Can't expect Microsoft to spend millions or billions of dollars and engineering resources on developing Windows and all those APIs - and then Apple just come and freeload off them, can you?
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Sorry, but it doesn't. Real choice for consumers is paying and downloading a third party app from the developer's website. Real choice is third parties developing and distributing their own apps on their platform of choice while paying the corresponding IP to the owner of the development kit, hardware and OS and not be obliged to host on ANY app store their work. Many here say, I don't wanna be binded to Apple's payment system. That's good, but don't fall in the trap that chains yourself to another gatekeeper. Legislate to leave the gate open and let the developers pay their dues, and the IP owners receive their revenue and pay their taxes. What's so complex about that? Why over-legislate?
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...on the basis of fundamental or constitutional rights.
(Or overriding law. But the thing is: This is EU law, there isn't much above that)
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So Apple will choose a temporary $1billion fine (no indication yet says this will be ongoing until compliance) which they can earn back in less than a year, or give up a market worth multiple billions YOY. Unless the financial checks, Apple will find them difficult to replace lost Markets and will be forced to stay and comply.
So you are Telling us you have the capital to sponsor Apple $20-30 billion per quarter so Apple can pull out of EU market without financial harm?
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