EU Reportedly Planning to Charge Apple for Violating Digital Markets Act

[AppliedMicro]

Apple isn't charging developers for link access.

They are - or at least they intend to:

https://developer.apple.com/support/music-streaming-services-entitlement-eea/

The DMA requires companies that are subject to the rules to provide access to certain things for free. Linking to external web sites is part of that. According to this article, the EU is going to try and say the Core Technology Fee is somehow violating that part of the DMA. IMO, I don't see how the EU can make that argument since the CTF is based on the total number of installations of for-profit apps within iOS. It's seems clear that the fee is not related to linking at all.

The fee is not related to linking. I have got no idea how/where you‘re reading that interpretation (that it is about linking) into the article. It doesn’t mention linking at all. Linking or not, the CTF discourages developers from offering their apps on other stores - and stifles competition.

As for roles/economic purposes, the text you posted can easily apply to gaming consoles as well

It could but it doesn’. Gaming consoles aren’t routinely used to order food, transportation or make banking transactions.

Per being "essential", iOS and Android and their respective APIs have never been FRAND designated by the EU

They haven’t and they don’t need to. They often aren’t even patentable.
But it’s economic reality that they are essential platforms for app developers.

The reality is that Microsoft and Amazon didn't really do enough to differentiate their products and get consumers excited about them as alternatives

Strongly disagree. Microsoft had a very well-differentiated mobile OS platform with different design language that ran with modest hardware requirements. And well-designed hardware devices (from Nokia), including some very affordable ones.

They were merely a bit „late toothed party“ and lacked the ecosystem of third-party apps that both iOS and Android had developed a bit earlier.

That is the reality:

Apple has never had the ability to prevent companies from entering the market with rival products.

They have - but it’s not so much an „ability“ as just an economic condition: They just captured the mobile OS/app market early.

That’s what led to the demise of Windows Phone, BlackberryOS, webOS: death spirals of lack of (critical mass of) users and app ecosystem. And that, the lack of an established app ecosystem, is what prevents a third mobile OS or „App Store“ from emerging as relevant for the foreseeable future.

 

[AppliedMicro]

I demand Europe’s grocery stores allow me to sell my cookies on their shelves without paying them a cut of the sales.

If all cookie manufacturers in Europe have to sell through no more than (a duopoly of) two competing grocery stores throughout Europe, and if those grocery store chains control the supply and use of ingredients and promotion of outside (e.g. manufacturer to consumer) sales of cookies in similar ways as Apple…

…you can be assured that the European Union will regulate cookie sales. And I will support that.

It‘s not as if grocery stores could revoke cookie manufacturers‘ to make or sell cookies overnight by revoking their …

👉 …well, what’s the cookie equivalent of a digital signing certificate again?

 

[jlc1978]

That would be accurate if Apple actually lowered the fees but the fees have always been 30%. Only some smaller developers get the 15% and Apple has stringent requirements for it.

I suspect many of the developers, if not the majority, make less than $1million per year and thus pay 15%; yet none dropped prices with the lower fee. I have no doubt we won't see lower price if other stores are cheaper, though I suspect after all costs are paid they won't be.

Most of the subscriptions or other virtual content someone buys on an iPhone app is still subjected to the 30% fee and upcharge.

Only in the first year; 15% thereafter. How many subscription prices drop after year one? I think developers have shown what will happen if fees are lowered and it's not lower prices for consumers.

Sideloading won’t make piracy much easier due to app signing. It’s possible to bypass app signing on MacOS with pirated software but I don’t expect it to be possible on iOS without a jailbreak or exploit like in the past.

I suspect the MacOS model is the endgame and then the Jolly Roger can rule the seas again; which is why I think small developers may be teh collateral damage in this effort.

 

[sideshowuniqueuser]

The EU is just a legal mafia shaking down innocent American companies. They are specifically targeting American companies and leaving out their own super monopolistic company Spotify.

Maybe it's because American companies are so used to American citizens being so willing to let these companies walk all over them, to the point that it has become an ideological expectation. So when the same companies, with the same executives and ideology, try to do the same in foreign jurisdictions, and come up against friction, their brains simply can't compute, and carry on trying to walk all over those citizens, resulting in a big fat fail.

 

[robfoll]

Why should any company get access to Apple's App Store and consumer base for free? These companies like Epic Games and Spotify have done nothing to add value to the ecosystem and are using the EU to parasite off Apple.

 

[robfoll]

I suspect many of the developers, if not the majority, make less than $1million per year and thus pay 15%; yet none dropped prices with the lower fee. I have no doubt we won't see lower price if other stores are cheaper, though I suspect after all costs are paid they won't be.



Only in the first year; 15% thereafter. How many subscription prices drop after year one? I think developers have shown what will happen if fees are lowered and it's not lower prices for consumers.



I suspect the MacOS model is the endgame and then the Jolly Roger can rule the seas again; which is why I think small developers may be teh collateral damage in this effort.

As an ex-iOS developer, I always considered the 30% a great value for accessing global distribution and payment systems.

 

[redheeler]

Only in the first year; 15% thereafter. How many subscription prices drop after year one? I think developers have shown what will happen if fees are lowered and it's not lower prices for consumers.

Which apps specifically are you referring to?

 

[redheeler]

Why should any company get access to Apple's App Store and consumer base for free? These companies like Epic Games and Spotify have done nothing to add value to the ecosystem and are using the EU to parasite off Apple.

You really think no one would care if Spotify was removed from the App Store? In reality the backlash would be huge and would result in some people moving away from Apple who otherwise stay in the Apple ecosystem buying Apple devices. Spotify and other third-party developers do make money for Apple even without the App Store fees.

 

[jgdeschamps]

Not sure why you lead with disagreeing - to me it sounds like we're in agreement.

The DMA doesn't require apps be distributed through a marketplace. They can be made available through their own website. It's Apple that did not want to give that option.

No, the legislation is written to allow other marketplaces like the App store to allow "competition." That's why Apple reacted with their solutions, and why everyone keeps posting that the legislation is vague, etc.

 

[redheeler]

I suspect the MacOS model is the endgame and then the Jolly Roger can rule the seas again; which is why I think small developers may be teh collateral damage in this effort.

I haven't seen any evidence to support this, so far it has all pointed to app signing continuing being mandatory on iOS even after sideloading becomes a possibility.

It's a problem for free and open-source software development on the platform as developers of these projects may not even make enough to afford the $99 annual fee, thus having to charge users for something they think should be free (or rely on donations/sponsorships assuming the project is well-known enough), but it is what it is. I think there should be exceptions to this fee for projects that have committed to being free and published their full source code under a permissive license, but not that app signing should be waived completely.

 

[Beautyspin]

Says the person who argued all week against a typo of 10 cores not 9...

Nice to see youve moved along on your attacks on Apple.
At least if Apple pulled out of India you wouldnt have to worry about if you believe any of their product info anymore...

Sure. I kept repeating the same answer to the same repeated questions, so I quit. I can educate somebody who is ignorant. Cannot do that if someone acts ignorant.

 

[Beautyspin]

That of course, depends on the result of the litigation.

Yes, but can Apple take the risk? They will be fined on a daily basis while non-compliant. Assuming a daily revenue of 1 billion, they could be fined around 100 million per day. Assume that the case drags on for more than a year. That will be 36 billion per year at stake for Apple. Do you think Apple will take the risk?

I suspect they would close it before they would do that; without access to Apple's technology and scale they would be no different than any other store when it comes to signing, etc. and of no value to Apple.

So, they would risk billions in fines, be ready for zero revenue from the Appstore rather than comply with the rules which might result in possibly some revenue loss? How does that make any business sense.

Don't bet on it with regards to fundamentally altering a company by forcing a split; much comes down to the party in power as to what they may or may not do and their view of the value of global relationships. Tariff wars, for example, are often a tit for tat move; and regulating is different than forcing a split which impacts the business globally.

The EU has 27 member states. That acts as a buffer, I guess, for political maneuvering. When the US is also going the same way, Tit-for-tat will be difficult to expect, I am guessing.

 

[Beautyspin]

dont forget the EU also made the USB C port ruling and didnt include enough detail that time either.
they dont learn.

USB C was for recharging and ensuring all devices could use the same cable.

they forgot that USB C transfer speeds for data.
so iPhone 15 get USB2.0 speeds while iPhone Pro users get much much faster USB 3.0 transfer rates.

The EU just seem to repeat the same vague directives.

The vagueness will disappear once Apple accrues a couple of billions in fine just as the things became miraculously clear to Apple in the Dutch ACM case once it was fined on a weekly basis.

Dutch ACM Upholds its Penalty Order against Apple: Apple’s App Store Terms Are in Breach of Competition Law - Kluwer Competition Law Blog

On 2 October 2023, the Dutch competition authority ACM published its decision on the objections filed by Apple on 13 July 2023 (decision on objection) against the ACM’s decision of 24 August 2021 imposing an order subject to periodic penalty payments on Apple for infringing the abuse of...

competitionlawblog.kluwercompetitionlaw.com

 

[Abazigal]

The fee is not related to linking. I have got no idea how/where you‘re reading that interpretation (that it is about linking) into the article. It doesn’t mention linking at all. Linking or not, the CTF discourages developers from offering their apps on other stores - and stifles competition.

So here's the thing.

I cannot find anything in the DMA which says outright that Apple is barred from charging developers who offer their apps through third party app stores. In fact, it's intentionally vague on this (it's almost as though the EU doesn't dare to say the ugly part out loud because they know it would be a blatant violation of Apple's property rights).

That's why Apple came up with the CTF in the first place. It solves the problem of charging developers for access to their iOS platform (again, something Apple is not technically barred from doing under the DMA), while making it easy for Apple to calculate how much to bill developers (since they don't need to keep track of revenue earned, something Apple would struggle to accomplish without iTunes billing). It's a pretty elegant solution to me to an ugly problem brought about by the DMA.

However, by your interpretation, the CTF shouldn't be allowed because it discourages developers from venturing outside the App Store (or at least, developers of free apps).

In an earlier response, you also asserted that Apple should have no business billing developers whose apps are sold outside of the App Store. In other words, they should be allowed to keep 100% of revenue.

Does this then not contradict the DMA? Like the EU doesn't expressly prohibit Apple from trying to charge developers, yet at the same time, it seems like the EU is going to reject any proposal made by Apple that would attempt to charge them even a single cent. There's also the question of determining how much to bill developers for.

This is your definition of "good legislation"? It's literally the passive aggressive girlfriend who is mad with you, yet refuses to tell you what she is upset about.

 

[Abazigal]

The vagueness will disappear once Apple accrues a couple of billions in fine just as the things became miraculously clear to Apple in the Dutch ACM case once it was fined on a weekly basis.

Dutch ACM Upholds its Penalty Order against Apple: Apple’s App Store Terms Are in Breach of Competition Law - Kluwer Competition Law Blog

On 2 October 2023, the Dutch competition authority ACM published its decision on the objections filed by Apple on 13 July 2023 (decision on objection) against the ACM’s decision of 24 August 2021 imposing an order subject to periodic penalty payments on Apple for infringing the abuse of...

competitionlawblog.kluwercompetitionlaw.com

Or the EU could simply come out and clarify once and for all, in no uncertain terms, just exactly what it is they want Apple to do.

 

[JimmyHook]

If all cookie manufacturers in Europe have to sell through no more than (a duopoly of) two competing grocery stores throughout Europe, and if those grocery store chains control the supply and use of ingredients and promotion of outside (e.g. manufacturer to consumer) sales of cookies in similar ways as Apple…

…you can be assured that the European Union will regulate cookie sales. And I will support that.

It‘s not as if grocery stores could revoke cookie manufacturers‘ to make or sell cookies overnight by revoking their …

👉 …well, what’s the cookie equivalent of a digital signing certificate again?

Oh, so now the standard is duopoly, not monopoly. Why not triopoly? You better start running now, your goalposts are moving away from you.

 

[JimmyHook]

Hardly interesting. The mechanism is contacting the European Commission. The DMA clearly specifies the directorates general is responsible for enforcement.

There are literally only six companies with gatekeeper designation.

The names, addresses, phone numbers are all listed on the EC page.

Yes, it’s totally logical that these companies would risk a significant portion of their global income when all they had to do is read a “Contact Us” page. Yup, totally checks out

 

[JPack]

Yes, it’s totally logical that these companies would risk a significant portion of their global income when all they had to do is read a “Contact Us” page. Yup, totally checks out

Did you seriously think there would be a "mechanism to pre-approve a platform’s policies"? Did the U.S. DOJ have a "mechanism" for Apple to review and avoid the current antitrust lawsuit? The DMA is targeted at only 6 gatekeeper companies. It should be obvious gatekeeper companies would need to sit down and talk to the EC about what they want.

Apple's former SVP of Legal, Bruce Seawell, said in an interview at Columbia Law they have a $1B annual budget. The goal is to "steer the ship as close to that [legally dividing] line as you can" because that's where the competitive edge is. In other words, Apple will test out in EU courts what the boundaries of the DMA are.

So yes, it checks out.

 

[Abazigal]

Apple's former SVP of Legal, Bruce Seawell, said in an interview at Columbia Law they have a $1B annual budget. The goal is to "steer the ship as close to that [legally dividing] line as you can" because that's where the competitive edge is. In other words, Apple will test out in EU courts what the boundaries of the DMA are.

As Apple should.

If the EU won’t make clear where those lines are, then it’s really up to Apple to keep poking and prodding until they discover those boundaries for themselves.

This will allow Apple to avoid capitulating any more than they absolutely have to.

 

[JimmyHook]

Did you seriously think there would be a "mechanism to pre-approve a platform’s policies"? Did the U.S. DOJ have a "mechanism" for Apple to review and avoid the current antitrust lawsuit? The DMA is targeted at only 6 gatekeeper companies. It should be obvious gatekeeper companies would need to sit down and talk to the EC about what they want.

Apple's former SVP of Legal, Bruce Seawell, said in an interview at Columbia Law they have a $1B annual budget. The goal is to "steer the ship as close to that [legally dividing] line as you can" because that's where the competitive edge is. In other words, Apple will test out in EU courts what the boundaries of the DMA are.

So yes, it checks out.

Yes, it would be logical for the EU to tell Apple ahead of time EXACTLY what is legal and what isn’t, before they rewrite their code and implement a bunch of changes.

The DoJ is relying on antiquated laws, trying to apply them in our modern era. They likely won’t succeed, as many of these complaints were already litigated in other courts. The US has no laws defining a vertically integrated company as a single market, especially when that company’s platform isn’t used by a majority of consumers, and there is competition.

If a government goes out of their way to implement a host of new regulations that apply to major platforms, and platforms have to rethink their business operations as a result, it would only be logical that said government would work with those platforms to ensure their overhauls comply with the new regs. It would be odd if said government rigorously enforced these new regs without advising those platforms how to comply. Which is exactly what a pre-approval process would look like.

Apple: “We read your regs, and we want to do xyz in response to them. Are you cool with that?”

EU: “Sure. That’s allowed.” (Or not).

That’s why people are beginning to conclude that the EU has ulterior motives, especially when they admitted that they should have done more to protect Nokia’s dominance. It’s all politics.

 

[JPack]

Yes. That would be logical. The DoJ is relying on antiquated laws, trying to apply them in our modern era. If a government goes out of their way to implement a host of new regulations that apply to major platforms, and platforms have to rethink their business operations as a result, it would only be logical that said government would work with those platforms to ensure their overhauls comply with the new regs. It would be odd if said government rigorously enforced these new regs without advising those platforms how to comply. Which is exactly what a pre-approval process would look like.

Apple: “We read your regs, and we want to do xyz in response to them. Are you cool with that?”

EU: “Sure. That’s allowed.” (Or not).

Just because there aren't resources and guides listed publicly on the EC website doesn't mean there's no mechanism. In all likelihood, there is a pool of staff in Brussels to advise companies on this matter.

 

[Sophisticatednut]

As Apple should.

If the EU won’t make clear where those lines are, then it’s really up to Apple to keep poking and prodding until they discover those boundaries for themselves.

This will allow Apple to avoid capitulating any more than they absolutely have to.

Or force them to capitulate more than they need to as the risk reward for it increases.

Apple doesn’t have infinite tries.

Perhaps you need to take a course in understanding things you’re talking about as you continue to fail to understand it and the text

Digital Markets Act (DMA) | Online Training

Earn your Digital Markets Act Trained Professional (DiMaActTPro) certification online. Gain the essential skills to pass the exam and receive the certificate of completion, providing independent evidence of your quantifiable understanding of the subject matter

www.eu-digital-markets-act.com

 

[Sophisticatednut]

Yes, it would be logical for the EU to tell Apple ahead of time EXACTLY what is legal and what isn’t, before they rewrite their code and implement a bunch of changes.

No it doesn’t make any sense. Every time they want it tested it is exclusively through a full legal investigation taking in to account the full markets opinion and evaluation of the impact.

Apple is told what they need to change, and the changes will be investigated. Why are American companies so bloody lazy that they need to have everything done for them like perpetual children?

The DoJ is relying on antiquated laws, trying to apply them in our modern era. They likely won’t succeed, as many of these complaints were already litigated in other courts. The US has no laws defining a vertically integrated company as a single market, especially when that company’s platform isn’t used by a majority of consumers, and there is competition.

If a government goes out of their way to implement a host of new regulations that apply to major platforms, and platforms have to rethink their business operations as a result, it would only be logical that said government would work with those platforms to ensure their overhauls comply with the new regs. It would be odd if said government rigorously enforced these new regs without advising those platforms how to comply. Which is exactly what a pre-approval process would look like.

Apple: “We read your regs, and we want to do xyz in response to them. Are you cool with that?”

EU: “Sure. That’s allowed.” (Or not).

This would mean EU would be the one writing the exact solution for them, and that is not what they want to do. But if apple really want that it will be forced on them like usb c

 

[Sophisticatednut]

Why should any company get access to Apple's App Store and consumer base for free? These companies like Epic Games and Spotify have done nothing to add value to the ecosystem and are using the EU to parasite off Apple.

As an ex-iOS developer, I always considered the 30% a great value for accessing global distribution and payment systems.

Nowhere in the DMA is the AppStore required to be available for free.

And that’s the issue, there’s no such thing as ”Apples consumers”. They are not the property of Apple, and should be free to access and do business with whoever they want without any interference from Apple.

Apple think they are entitled to users.

 

[wilhoitm]

App Store Revenue. Revenue in all sales and products is 24 %

Riddle me this? What entitles the EU to Apple's revenue outside of the EU? That seems illegal to me. How does Apple fight that? Can a Government be sued?