EU Reportedly Planning to Charge Apple for Violating Digital Markets Act

[bcortens]

Except the first sale doctrine only deals with resale of the original copy. It has nothing to do with what we are talking about. It does not give you rights to modify the software, nor does it give developers rights to distribute modifications to the software. It certainly doesn't mean that Apple should be forced to modify it's software to support third-parties.

As I pointed out in my post above, I have the right to even decompile software to enable interoperability if I want.

Directive - 2009/24 - EN - EUR-Lex

eur-lex.europa.eu

You're right that the existing Law did not require Apple to modify its software to support interoperability/third party software, but the DMA does seem to mandate that.

Again, all it means is that you can resell the original copy that you purchased and pass on the original licensing terms. Hence, the name.

The fact that I own a copy of the software means that I can choose to install or create programs to interoperate with it.
There are even exemptions to the restrictions on reproducing the software with the goal of enabling interoperability:

From the above link point 15:
"It has therefore to be considered that, in these limited circumstances only, performance of the acts of reproduction and translation by or on behalf of a person having a right to use a copy of the program is legitimate and compatible with fair practice and must therefore be deemed not to require the authorisation of the rightholder. An objective of this exception is to make it possible to connect all components of a computer system, including those of different manufacturers, so that they can work together."

It should be noted that the DMA goes further than this even in requiring not only that Apple not prevent these actions to enable interoperability but that Apple actively facilitate interoperability via the way they design their software.

 

[BaldiMac]

As I pointed out in my post above, I have the right to even decompile software to enable interoperability if I want.

Directive - 2009/24 - EN - EUR-Lex

eur-lex.europa.eu

So? Nothing to do with the first sale doctrine, or anything else we are talking about. No one is arguing that there aren't exceptions to copyright.

You're right that the existing Law did not require Apple to modify its software to support interoperability/third party software, but the DMA does seem to mandate that.

The fact that I own a copy of the software means that I can choose to install or create programs to interoperate with it.
There are even exemptions to the restrictions on reproducing the software with the goal of enabling interoperability:

From the above link point 15:
"It has therefore to be considered that, in these limited circumstances only, performance of the acts of reproduction and translation by or on behalf of a person having a right to use a copy of the program is legitimate and compatible with fair practice and must therefore be deemed not to require the authorisation of the rightholder. An objective of this exception is to make it possible to connect all components of a computer system, including those of different manufacturers, so that they can work together."

It should be noted that the DMA goes further than this even in requiring not only that Apple not prevent these actions to enable interoperability but that Apple actively facilitate interoperability via the way they design their software.

Great. You were wrong about the first sale doctrine, so you're moving on to misinterpret another directive. Again, nothing in this directive prevents Apple from licensing access to its platform.

 

[bcortens]

So? Nothing to do with the first sale doctrine, or anything else we are talking about. No one is arguing that there aren't exceptions to copyright.

We're talking about whether or not I (as the owner of the iPhone) have the right to allow third parties to access the software on my phone. Given the previous discussion this does have bearing on what Apple, as the creator of the software IP, has a right to monetize. Software that was on the phone at point of sale (or that Apple distributes for free, which is their choice) is software I now own a copy of, including the implementation of the APIs that are on the device.

As I said, Apple was not required to facilitate this access prior to the DMA. Prior to the DMA the only way I could exercise my right to enable software interoperability was via jailbreaking. The DMA aims to force Apple to allow us to do this without jailbreaking. Apps that are installed on a jailbroken phone aren't making illegal use of Apple's APIs because the API implementations were included with a copy of the software I purchased.

Great. You were wrong about the first sale doctrine, so you're moving on to misinterpret another directive. Again, nothing in this directive prevents Apple from licensing access to its platform.

I wasn't wrong about first sale doctrine. Apple can't license access to software I already own a copy of. Why? Because I own the phone. See above, I mentioned that Apple wasn't previously required to facilitate this but they cannot actually prevent me from installing software on a jailbroken phone nor could they extract revenue from the devs who build against APIs that were already on the phone.

The link I highlighted was to point to one of the directives that was involved in the oracle decision (IIRC) which reinforced that software is not licensed but owned. That is why I highlighted it, it is not irrelevant. It is a directive that has bearing on software ownership and the rights of those who create the software which is relevant to what we are talking about.

 

[surferfb]

The EU considers sale of software to be ownership of a copy:

EU Court: When You Buy Software You Own It

Public Knowledge promotes freedom of expression, an open internet, and access to affordable communications tools and creative works. We work to shape policy.

publicknowledge.org

CJEU Rules First Sale Doctrine Applies to Digital Copies of Software in Europe

In an eagerly-awaited judgment, the Court of Justice of the European Union (CJEU) has held that the first sale doctrine applies to digital copies of software sold in the European Union or European Economic Area. In Luxembourg on 3 July 2012, the CJEU held that the resale and use of used...

www.mwe.com

CURIA - Documents

curia.europa.eu

Even decompilation is legal if I want to run software I write myself

Directive - 2009/24 - EN - EUR-Lex

eur-lex.europa.eu

What this is not:
This is not nationalization of Apple's IP, no matter how many times you repeat it.
Nationalization would be someone saying that I can take iOS and resell/redistribute as many copies as I want.
Nationalization would be saying Apple must give iOS updates away for free (Apple can charge for iOS updates if it needs to recoup costs to develop the APIs and iOS itself). Apple sells a whole product, iPhone, which is a software and hardware product. The first sale doctrine applies in the EU.

Yeah, you're just completely misunderstanding how the law works if you're arguing first sale doctrine applies here. I'm not going to argue this point since @BaldiMac has already explained why you're wrong more clearly and concisely than I would and based on the examples you are giving in your responses to @BaldiMac, (which also don't apply in this situation), you're just going to dig your heels in further.

I'll just say for the benefits of others reading that first sale doctrine does not mean that developers don't have to pay Apple for a license to use Apple's intellectual property, or that somehow Apple has actually sold a copy of iOS to you when you bought an iPhone, or even if Apple DID sell end users a copy of iOS (which, again, it didn't) that fact would somehow mean that Apple has given up the ability to charge developers to use its intellectual property for commercial ventures.

 

[BaldiMac]

We're talking about whether or not I (as the owner of the iPhone) have the right to allow third parties to access the software on my phone. Given the previous discussion this does have bearing on what Apple, as the creator of the software IP, has a right to monetize. Software that was on the phone at point of sale (or that Apple distributes for free, which is their choice) is software I now own a copy of, including the implementation of the APIs that are on the device.

As I said, Apple was not required to facilitate this access prior to the DMA. Prior to the DMA the only way I could exercise my right to enable software interoperability was via jailbreaking. The DMA aims to force Apple to allow us to do this without jailbreaking. Apps that are installed on a jailbroken phone aren't making illegal use of Apple's APIs because the API implementations were included with a copy of the software I purchased.

Again, the first sale doctrine has nothing at all to do with whether you "have the right to allow third parties to access the software". It simply allows you to resell the original copy.

I wasn't wrong about first sale doctrine. Apple can't license access to software I already own a copy of. Why? Because I own the phone. See above, I mentioned that Apple wasn't previously required to facilitate this but they cannot actually prevent me from installing software on a jailbroken phone nor could they extract revenue from the devs who build against APIs that were already on the phone.

The link I highlighted was to point to one of the directives that was involved in the oracle decision (IIRC) which reinforced that software is not licensed but owned. That is why I highlighted it, it is not irrelevant. It is a directive that has bearing on software ownership and the rights of those who create the software which is relevant to what we are talking about.

Again, you're simply wrong. For example, the directive that you quoted clearly and specifically applied to interoperability of "computer systems" (hardware) not "computer programs".

 

[ProbablyDylan]

None of this circular intellectual property discussion addresses the issue of Apple's exploitative, abnormal business model. Imagine if Microsoft implemented the same terms for Windows software? Or Google for Android Software? Or, heck, Apple for MacOS software?

 

[BaldiMac]

None of this circular intellectual property discussion addresses the issue of Apple's exploitative, abnormal business model. Imagine if Microsoft implemented the same terms for Windows software? Or Google for Android Software? Or, heck, Apple for MacOS software?

There is nothing abnormal about it. Just because a few of the biggest OSs don't charge a platform fee doesn't mean that Apple can't or that there aren't thousands of other platforms that charge as well.

 

[AppliedMicro]

The regulation should therefore address the failure of the market

It does.

The regulation should therefore address the failure of the market instead of micro-managing what the existing players can/can’t do. Creating more competition will almost always be better than micro-managing.

General-purpose operating systems are a natural oligopoly. They cost tons of money o develop and maintain - and much more importantly, users will gravitate towards a few (two or three of them). The market only bears a low number of competing systems.

Basically nobody wants „more competition“, when that means starting from a blank slate of a lack of third-party applications. Consumers aren’t going to use such a system (without existing ecosystem of third-party apps). And developers don’t want to develop for one.

When infrastructure companies, say the local water, power or (fixed line) internet cable company abuse their their monopoly power duopoly, it doesn‘t make sense to encourage half a dozen new competitors to enter the market - if they have start to build their own network from scratch that parallels the incumbents’ networks.

 

[ProbablyDylan]

There is nothing abnormal about it. Just because a few of the biggest OSs don't charge a platform fee doesn't mean that Apple can't or that thousands of other platforms don't as well.

We clearly have different definitions of abnormal. Regardless - iOS is the odd one out.

 

[BaldiMac]

We clearly have different definitions of abnormal. Regardless - iOS is the odd one out.

It's not that we have different definitions of abnormal, it's simply that I'm aware that there's more platforms that the ones you cherry-picked to make your point.

 

[bcortens]

Again, the first sale doctrine has nothing at all to do with whether you "have the right to allow third parties to access the software". It simply allows you to resell the original copy.

Again, you're simply wrong. For example, the directive that you quoted clearly and specifically applied to interoperability of "computer systems" (hardware) not "computer programs".

That directive does not define "computer systems" as hardware, . Furthermore, it does define that "For the purpose of this Directive, the term ‘computer program’ shall include programs in any form, including those which are incorporated into hardware. "

I will admit that I was wrong to claim that first sale doctrine fully elaborates on what I (the owner of a copy of the software) can do with the copy. However I think that the first sale doctrine does then lead into copyright law.

I will ask you a question:
Do you think programs distributed through Cydia to jailbroken iPhones are illegal?

Fundamentally, if what you and others claim about IP ownership is true Apple should be able to shut down Cydia as those Apps are using the API implementations and thus IP that comes with the phone without paying Apple for it.

 

[surferfb]

None of this circular intellectual property discussion addresses the issue of Apple's exploitative, abnormal business model. Imagine if Microsoft implemented the same terms for Windows software? Or Google for Android Software? Or, heck, Apple for MacOS software?

Would you rather go back to the days of monetizing the platform by charging end users for the newest version of OS? (I believe I paid $129 for OS X Leopard way back when). Do we think developers would prefer having to support up to a decade of iOS versions? Would that result in a better end user experience? Better apps?

Also, you are telling me there are alternatives to iOS that developers can avail themselves of if they don't like Apple's terms and conditions? And after doing some research, it appears those alternatives actually have a majority of users in the EU. I was under the impression developers were forced to develop for Apple's monopoly or starve.

 

[ProbablyDylan]

It's not that we have different definitions of abnormal, it's simply that I'm aware that there's more platforms that the ones you cherry-picked to make your point.

I cherry picked...Apple's contemporaries? Which other platforms do people actually use?

 

[bcortens]

Would you rather go back to the days of monetizing the platform by charging end users for the newest version of OS? (I believe I paid $129 for OS X Leopard way back when). Do we think developers would prefer having to support up to a decade of iOS versions? Would that result in a better end user experience? Better apps?

Apple monetizes iOS and macOS via hardware sales.

Apple chose to stop charging for OS updates because it is to Apple's benefit to have everyone on the latest version. A more uniform platform target is desirable to not just third parties but Apple as well.

Apple has such obscene profits from Hardware that they can pay out 3x the amount in share buybacks that they spend on R&D and still put money in the bank! Apple makes absolutely monstrous margins on its hardware, the only reason they are chasing App Store revenue so aggressively is because it is the only way left to really grow their revenue. They are already saturating the addressable market of premium devices and so the only way to earn more revenue is finding ways of rent seeking on that market.

 

[AppliedMicro]

It’s been pointed out repeatedly to you that the developer subscription does NOT give a license to Apple’s IP.

👉🏻 What IP doesn‘t it give access or a license to? 🤷 Please nam the kind of IP.

Again: it gives all of the tools and licenses for third-party developers to develop, build and distribute apps - and use Apple’s available APIs. That’s a fact.

The only thing it does not cover: promoting and selling digital goods/services in-app (and, given how brazen Apple‘s „we own the consumer“ stance is, also via email and other communication channels, if obtained through the app).

And that’s about the only exceptions the DMA opens up:
Third-parties can market to consumers in-app.
And they can sell their product or service elsewhere.
Yet Apple can still charge for access to their IP - as they do with the developer subscription.
It’s just being slightly restricted compared to prior to the DMA.

How’s that? Anybody can open an app store. People are raging over the CTF.

Anybody can open an App Store - but only Apple‘s does not charge a CTF - which gives Apple an unfair competitive advantage.

It never was. We’re not discussing that.

Yes we are. Despite your repeated claims to the contrary, Apple‘s IP isn‘t given away for free.
It’s properly licensed with the developer subscription as a fee for it.

 

[ProbablyDylan]

Would you rather go back to the days of monetizing the platform by charging end users for the newest version of OS? (I believe I paid $129 for OS X Leopard way back when).

Yes. I wouldn't mind paying for software updates.

Do we think developers would prefer having to support up to a decade of iOS versions? Would that result in a better end user experience? Better apps?

I'm genuinely not sure what that has to do with this discussion. What part of this has to do with supporting old software?

Also, you are telling me there are alternatives to iOS that developers can avail themselves of if they don't like Apple's terms and conditions? And after doing some research, it appears those alternatives actually have a majority of users in the EU. I was under the impression developers were forced to develop for Apple's monopoly or starve.

If they don't like the EU's terms and conditions, they can just not do business there, right? There's alternatives to Europeans; in fact, most people don't even live in the EU. It's not like Apple has to sell them iPhones or go under.

 

[surferfb]

Apple monetizes iOS and macOS via hardware sales.

Apple chose to stop charging for OS updates because it is to Apple's benefit to have everyone on the latest version. A more uniform platform target is desirable to not just third parties but Apple as well.

Apple has such obscene profits from Hardware that they can pay out 3x the amount in share buybacks that they spend on R&D and still put money in the bank! Apple makes absolutely monstrous margins on its hardware, the only reason they are chasing App Store revenue so aggressively is because it is the only way left to really grow their revenue. They are already saturating the addressable market of premium devices and so the only way to earn more revenue is finding ways of rent seeking on that market.

Which is entirely within their rights to do! Just because I make a lot of money doing my primary job doesn't mean I'm not allowed to make more money doing a side job. Apple isn't a charity. I swear - it seems like a lot of you (including, apparently the EU) think that because the market is rewarding Apple's approach that it needs to make its products worse for users, make less money, give it's intellectual property away for free, and allow competitors full access to Apple's hardware and software until people decide they don't like Apple anymore.

 

[bcortens]

Which is entirely within their rights to do! Just because I make a lot of money doing my primary job doesn't mean I'm not allowed to make more money doing a side job. Apple isn't a charity. I swear - it seems like a lot of you (including, apparently the EU) think that because the market is rewarding Apple's approach that it needs to make its products worse for users, make less money, give it's intellectual property away for free, and allow competitors full access to Apple's hardware and software until people decide they don't like Apple anymore.

You keep saying they are giving away the IP for free, they aren't.

I'll ask you the same thing that I asked Baldi:
Do you think programs distributed through Cydia to jailbroken iPhones are illegal?

If what you and others claim about IP ownership is true then Apple should be able to shut down Cydia as those Apps are using the API implementations (and thus IP) that come with iOS without paying Apple for it.

 

[BaldiMac]

That directive does not define "computer systems" as hardware, . Furthermore, it does define that "For the purpose of this Directive, the term ‘computer program’ shall include programs in any form, including those which are incorporated into hardware. "

So, your logic goes "computer programs" are defined as software, so therefore "computer systems" are software? Hah! That's not how it works.

I will admit that I was wrong to claim that first sale doctrine fully elaborates on what I (the owner of a copy of the software) can do with the copy.

Great! That was my point in joining this discussion. Hopefully, it will never brought up again.

I will ask you a question:
Do you think programs distributed through Cydia to jailbroken iPhones are illegal?

That's way too complicated for me.

Fundamentally, if what you and others claim about IP ownership is true Apple should be able to shut down Cydia as those Apps are using the API implementations and thus IP that comes with the phone without paying Apple for it.

If you were right, why would so many developers pay for access to so many platforms? Do they not have lawyers as good as you? Why would a federal judge specifically say they have right to charge a platform fee to developers?

 

[ProbablyDylan]

I swear - it seems like a lot of you (including, apparently the EU) think that because the market is rewarding Apple's approach that it needs to make its products worse for users, make less money, give it's intellectual property away for free, and allow competitors full access to Apple's hardware and software until people decide they don't like Apple anymore.

It's hard to feel bad for a company with a 3.6T USD market cap. If they're as intelligent and innovative as they make themselves out to be, surely they can come up with another way to make money. Make the App Store a superior storefront? Change how licensing works when distributing software to European users? There's a million ways to skin this cat.

 

[AppliedMicro]

Companies can choose to charge different customers different amounts. Apple could decide blue app icons cost more than black app icons. They could decide apps from big developers have to pay more than small developers. As long as they are not discriminating for a protected reason (race, gender, nationality) they're free to charge how they charge.

These reasons reasons have now been expanded by law to prohibit gatekeepers from „imposing general conditions, including pricing conditions, that would be unfair or lead to unjustified differentiation.“

Apple has clearly laid out their rules when they charge a licensing cost for their IP and when they don't.

…and legislators have deemed (specific policies of) them unfair and/or undesirable.

If you are saying they aren't allowed to do that, then you are, in fact forcing them to give away their IP for free.

No - it’s only specific policies and conduct that are prohibited. The fact that you are probihited not charge anything you want for anything you want does not mean that what you offer is - or needs to be - given away for free.

👉🏻 Restricting how or what you can charge does not mean just giving away everything for free.

Specifically if the regulation leaves you with fair ways to charge.

If I say you can access my property for $99 + $500 a month but you can't have pets. You can't just give me the $99 and ignore the rest of the terms.

…unless the law prohibits landlords from disallowing pets in rental contracts.

It may even specifically make distinctions between different pets, e.g. „Can‘t disallow commonly kept pets such as cats, dogs or hamsters - but can still disallow snakes, apes or tigers“

 

[BaldiMac]

I cherry picked...Apple's contemporaries? Which other platforms do people actually use?

Xbox, Playstation, and Nintendo are the obvious examples that charge platform fees, but there are thousands of platforms.

 

[bcortens]

So, your logic goes "computer programs" are defined as software, so therefore "computer systems" are software? Hah! That's not how it works.

I couldn't find a definition of computer system in that document and it seems to be a software-hardware combination from context.

Great! That was my point in joining this discussion. Hopefully, it will never brought up again.

👍

That's way too complicated for me.


If you were right, why would so many developers pay for access to so many platforms? Do they not have lawyers as good as you? Why would a federal judge specifically say they have right to charge a platform fee to developers?

My point with this is that Cydia appears to be legal given that it has been allowed to exist nearly worldwide without legal challenge, and given Apple keeps trying to block the way that Jailbreaking occurs one would think they would target Cydia to have it shut down if they could. The US even modified the DMCA in order to add Smartphones and Tablets which made jailbreaking legal in the US.

My point is that if jailbreaking is legal, and, when a device is jailbroken, devs can take advantage of the software already on the device without having to pay to access it that implies that the IP on device has already been paid for.

What I am not saying is that Apple has to actively enable this sort of thing.

The EU DMA is however saying that Apple has to actively enable alternative app distribution.

I would argue that given the existence of Cydia that the EU should rule that the CTF is Apple illegally double charging for access to APIs that the customer already has already compensated Apple for. If the CTF is valid then apps distributed via Cydia shouldn't be legal.

 

[ProbablyDylan]

Xbox, Playstation, and Nintendo are the obvious examples that charge platform fees, but there are thousands of platforms.

These aren't really the same class of appliance as a smartphone though. Nobody has a Nintendo Switch as a primary computer, but plenty of people use their phones as their primary computer. Here's a CNBC article about it if you're interested.

And if you use a PlayStation as your primary computer, I'd love to hear more about that!

 

[BaldiMac]

I couldn't find a definition of computer system in that document and it seems to be a software-hardware combination from context.

The directive that you quoted was basically about allowing the creation of drivers for hardware compatibility.

My point with this is that Cydia appears to be legal given that it has been allowed to exist nearly worldwide without legal challenge, and given Apple keeps trying to block the way that Jailbreaking occurs one would think they would target Cydia to have it shut down if they could. The US even modified the DMCA in order to add Smartphones and Tablets which made jailbreaking legal in the US.

My point is that if jailbreaking is legal, and, when a device is jailbroken, devs can take advantage of the software already on the device without having to pay to access it that implies that the IP on device has already been paid for.

What I am not saying is that Apple has to actively enable this sort of thing.

The EU DMA is however saying that Apple has to actively enable alternative app distribution.

I would argue that given the existence of Cydia that the EU should rule that the CTF is Apple illegally double charging for access to APIs that the customer already has already compensated Apple for. If the CTF is valid then apps distributed via Cydia shouldn't be legal.

As I said, the topic of jailbreaking is way more complicated than I want to get into. But "Apple hasn't sued them so it must be legal" isn't a rational argument.

You seem to have ignored the questions I asked.

As far as your "double charging" argument, that's just nonsense on multiple levels.