The fines weren’t the only Digital Markets Act news coming from this fine continent today. The European Commission also closed its investigation into Apple’s user choice obligations under the DMA, and while Apple has made good progress in a few areas, the EC states Apple is still acting illegally in a variety of others.
First, the good news for Apple: the European Commission is happy with Apple’s changes regarding browser choice, the ability to remove preinstalled iOS applications, and the ability to change a whole bunch of default settings that are all locked outside of the EU. These are valuable and welcome changes, and I’m glad the European Union, the European Parliament, and the Commission have forced Apple to become less hostile to European consumers.
Second, there’s the bad news for Apple. Under the DMA, Apple is obligated to allow for third-party application stores, and the ability for users to download and install applications directly from the internet. In this area, Apple is still breaking European Union law.
The Commission takes the preliminary view that Apple failed to comply with this obligation in view of the conditions it imposes on app (and app store) developers. Developers wanting to use alternative app distribution channels on iOS are disincentivised from doing so as this requires them to opt for business terms which include a new fee (Apple’s Core Technology Fee). Apple also introduced overly strict eligibility requirements, hampering developers’ ability to distribute their apps through alternative channels. Finally, Apple makes it overly burdensome and confusing for end users to install apps when using such alternative app distribution channels.
↫ European Commission press release
This outcome was entirely expected, and pretty much everyone – except Apple’s PR attack dogs – knew Apple’s malicious compliance, fees, and onerous hurdles were going to be a hard sell. I’m glad the European Commission seems unimpressed with Trump’s sabre-rattling about the EU’s consumer protection laws, and is continuing to whip US tech companies in line, making sure they stop violating our consumer protection laws.
Since these are the outcomes of a preliminary investigation, Apple now has the chance to argue its case.
It seems like governments including the EU have been standing on the back foot for decades and that as a result so much damage as already been committed by apple and others. I wish they would enforce antitrust much more proactively so that competition doesn’t have to suffer for such prolonged periods before any action is taken to curb the abuses. Even once the blocks are removed, and who knows when this will truly happen, it will still take decades for the market to recover from previously unchecked monopolization that has gone on for way too long. Nevertheless I’m glad something’s finally being done – better late than never.
Also, while I’m glad the EU are trying to improve competition, some of their entitlements do seem morally wrong to me…
Even if one agrees with the EC’s motivation, as I do, I find that the EC overstepping their jurisdiction is a very stupid & dangerous precedent to set. This is something we’ve seen them do before as well. The problem of course is that if the EC goes about trying to fine markets that are outside of the EU, the EU will have much less credibility protesting interference from foreign governments in the future since the EU themselves are guilty of it themselves, which really bothers me. Apple deserves to be fined for not complying with the orders, but the courts still need to respect the principals of legal jurisdictions. I can envision future scenarios where things comes back to bite them badly: for example the US government could try to enforce US laws and orders on the EU without respect for jurisdiction.
These were tangential points. I just wanted to say that I am glad to see the DMA is starting to return control to consumers. It is so important to stand up against monopolistic abuses on behalf of consumers who need relief from monopolies interfering with our choices using underhanded control tactics rather than competing on merit. I applaud the EU for having a backbone here and standing up for consumer rights. I wish more governments would do so. Here in the US there’s a lot of corruption standing in the way.
They’re not trying to enforce their jurisdiction outside of the EU though. Basing it on the worldwide number is a simple way to sidestep the various accounting shell games these giant conglomerates otherwise play to pretend they made no money and thus owe no tax in a given region.
If they said that Apple needs to open up the app store outside the EU as well, then you’d be entirely correct though.
anevilyak,
If you disagree then so be it, but fining economic activity outside your jurisdiction is a bad precedent and not morally justifiable. If the US or russia did the same thing to the EU people would rightfully be upset then too, but it will be problematic for the EU to have been hypocrites.
But it’s not fining the economic activity outside the EU. It’s fining on activity *in* the EU, and just setting the size of the fine based on global income.
What are the alternatives?
– Have a fixed fine? Having a fine chosen so as to act as a deterrent to large corporations would bankrupt 90% of companies found to break that regulation. Having it small enough that it acts as a deterrent to small companies instead of obliterating them would make it pocket change for companies like Apple, who would simply consider it a fee for doing business in the EU.
– Base the size of the fine on profits declared in a given region? How does that work when companies like Apple can easily declare profits outside the jurisdiction? They can show a nominal income and thus pay a laughably small fine that would pass as a rounding error in the grand scheme of their global finances.
Basing a fine on a company’s income is a sensible and fair way to do it.
daedalus,
The fine should not be imposed on external activity. It’s being done explicitly.
It should be obvious, create the fine on EU activity starting low and going up if there’s no compliance. There’s not really much to debate.
Except that it’s not right for the EU to fine activity outside it’s jurisdiction and I think it’s naive to pretend this doesn’t matter as it could be weaponized against the EU in the future.