New EU rules may force change in how Apple promotes own apps in App Store

Posted:
in General Discussion edited December 2020
Apple and other tech giants may have to alter how they promote their own apps on platforms they control, with the EU competition head hinting at rule changes that could be revealed before the end of 2020.




The European Union is working on updating the Digital Services Act, a set of rules dictating how platforms like the App Store are protected, as well as governed. As part of the reformation effort, which could include alterations to how content is handled, there could be rules that advise how platform owners present services they also operate.

European Commissioner for Competition Margrethe Vestager told CNBC on Friday that changes will include elements concerning self-preferencing. "With power, with strength comes responsibility and part of that is, for instance, that you don't promote yourself when your services (are) in competition with other services," Vestager suggested.

For Apple, the rules would limit how it would promote its own apps and services through its storefronts, such as the App Store. For example, Apple may be prevented from actively promoting Apple Music as a service it offers ahead of rivals like Spotify.

According to Vestager, the exercise isn't really to do with the size of the platforms, more attempting to make sure there's fair competition. "That is the point, that if you have grown into this size that you actually do exercise control on yourself and that you enable other people to their business in a way that is fair and square," the competition chief added.

Apple is already under investigation by the European Commission, with probes looking into its Apple Pay and App Store activities.

The new legislation from the European Union and regulator the European Commission is anticipated to be presented to the European Parliament before the end of the year, potentially on December 9, but it will take time for it to be ratified by EU countries if the parliament agrees to the measures.

As well as competition, the regulatory refurbishment also covers areas including handling misinformation and deceitful content, the potential sharing of customer data with smaller rivals, and digital taxation, among other topics.

Apple and other major companies potentially affected by the rules were invited to discuss the proposals with the European Union in November. At the time, it was believed the session would not be particularly consequential, as the draft rules have largely been finalized, and were unlikely to undergo major edits at this late stage.
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Comments

  • Reply 1 of 28
    genovellegenovelle Posts: 1,220member
    Sounds to me like it would encourage me to keep my platform to myself and limit my tools to myself to ensure my success doesn’t lead to my failure. 
    viclauyyc
  • Reply 2 of 28
    larryjwlarryjw Posts: 807member
    Does Apple really compete with others?

    Okay, they have their iWork products like Pages, Numbers, Keynote, GarageBand. But they're up against Microsoft in this category, and MS wins in the completeness category. I use the Apple products for relatively routine and unsophisticated tasks, but any interaction with others means I need to use Word, and sometimes Google's products. 

    But, really now, Apple's products at best compete with Windows products. 
  • Reply 3 of 28
    larryjw said:
    Does Apple really compete with others?

    Okay, they have their iWork products like Pages, Numbers, Keynote, GarageBand. But they're up against Microsoft in this category, and MS wins in the completeness category. I use the Apple products for relatively routine and unsophisticated tasks, but any interaction with others means I need to use Word, and sometimes Google's products. 

    But, really now, Apple's products at best compete with Windows products. 
    It's an interesting thought. I don't think any consumer is indecently led or limited into using Apple's products. For example if we do a search for "Spotify" on the app store, you'll see first an ad (usually for TikTok), then Spotify in top ranked position, and the various music competitors (Youtube etc.) then finally after scrolling to the bottom, you'll see Apple Music. If searching "Music" you'll get Apple Music first, but keep in mind that's the name of the service, so this result is hardly surprising.

    User's generally mix and match their software to meet their preferences, or, if users of Apple products are choosing to complement their Apple device with other Apple services, this is also not extraordinary. Customers often buy new products from brands for which they have prior experience. Secondly Apple offer a level of integration in their services that companies like Spotify are either slow or simply refuse to offer. Pandora and iHeartRadio are both very fast at implementing new playback features, such as Apple Watch and CarPlay support.

    Then there is a question of new complementary products. Should the HomePod have launched with tie-ins to all 3rd party music platforms - even though this would require the 3rd party to perform additional unpaid work, expose Apple's trade secrets and potentially delay their own entry into the market, and what if they refuse, should the launch be cancelled because a 3rd party refuses to join?

    This whole argument seems moot - Spotify enjoys a significantly larger market share than Apple Music, and a mere 0.5% of Spotify's customers on iOS use the in-app payment feature. Since Spotify hasn't offered IAP for new users in years, that 0.5% are all at the 15% rate. That sounds like a pretty good deal for Spotify.
  • Reply 4 of 28
    sflocalsflocal Posts: 5,653member
    I'm still at a loss that a government can tell a company what they can and can't do with their widget.  This is not Microsoft of the 90's-2000's where it was using it's Windows dominance to force hardware manufacturers to its will.  This is Apple's software and hardware.  The entire beginning and ending point.  App developers are essentially tenants leasing space on Apple's widget to sell its wares - just like supermarkets - and that lease is paid for by its 30% (or 15%) cut of sales, exactly like supermarkets and many commercial establishments.  

    I'm an app developer too and I'm just embarrassed and the level of entitlement that many App developers show.  It's as if they deserve to take a free ride on the work of another company.  Apple does all the work in creating new products that countless consumers love, and work hard to get those consumers to continue spending money on that ecosystem, maintaining that ecosystem with data centers, distribution, paying employees to keep it all running, etc... and then do it all again for the next iDevice.

    I'm sure there will be an agreement somewhere, but in the end, if I have a widget, I would have no problem telling whatever government to go f**k themselves when they're expecting me to giver preference to a competitor, than to my own products/services on my own products!  I would immediately rid Spotify and Epic and ban them from the App Store forever.  If management/founders of those companies go to start another company to get back into the App Store, I'd ban them too.  I'd make it so that no company would want to do business with these people.
    edited December 2020 viclauyycchadbagaderuttermagman1979
  • Reply 5 of 28
    rob53rob53 Posts: 2,555member
    Is this going to affect any EU companies or only US ones? If the latter, then what happened to EU companies? Is the US the only country that provides these services? 
    chadbag
  • Reply 6 of 28
    gatorguygatorguy Posts: 22,988member
    rob53 said:
    Is this going to affect any EU companies or only US ones? If the latter, then what happened to EU companies? Is the US the only country that provides these services? 
    Of course it affects others. For example Spotify is a Swedish company. 

    If you're asking about EU tech companies with controlled app stores serving up 3rd party applications along with the integration of their own first party app options give us an example of who you're asking about.
    edited December 2020
  • Reply 7 of 28
    This is beyond stupid. It is like banned a Tv network promoting it’s own program.

    if there is one thing EU parliament should do, it is check their iq and their understanding of real world. They now started to act like Chicom who want to control everything from outside. 
    magman1979
  • Reply 8 of 28
    crowleycrowley Posts: 8,164member
    rob53 said:
    Is this going to affect any EU companies or only US ones? If the latter, then what happened to EU companies? Is the US the only country that provides these services? 
    Sony and Nintendo run app stores.
  • Reply 9 of 28
    No worries, I’m sure “President Brainiac” will negotiate hard with the EU to protect American businesses... LOL. Who are we kidding? American businesses are going to be destroyed under the presumptive next administration.
    chadbaglkruppmagman1979
  • Reply 10 of 28
    No worries, I’m sure “President Brainiac” will negotiate hard with the EU to protect American businesses... LOL. Who are we kidding? American businesses are going to be destroyed under the presumptive next administration.
    So you're convinced Trump is continuing?
    muthuk_vanalingamavon b7
  • Reply 11 of 28
    entropysentropys Posts: 3,000member
    I am so glad my ancestors emigrated.
  • Reply 12 of 28
    crowleycrowley Posts: 8,164member
    If this means I stop seeing irritating inserts and notifications to get Apple Music, News+ and TV+ then I'm all for it.  Apple getting a bit obnoxious with those.
  • Reply 13 of 28
    Apple should fight back, but it will probably capitulate. Apple is supine when it comes to others wanting control over its own app stores.

    I vaguely remember a story from WW2 when Germany captured Denmark (my memory may be fuzzy but the story doesn't even have to be true to make my point.) The German occupiers spoke to the king and demanded that people wear a black armband if they belonged to a certain religion. Denmark ingeniously responded, "Okay, we will comply, but everyone across the country will wear a black armband." Suddenly the requirement was dropped. That would have been too much of an embarrassment to Germany.

    That lesson could be applied here. For example, if a software purchaser has to explicitly indicate Apple's name in any search for Apple's software, even if the restriction applies only to Apple, then Apple could apply that same requirement to other company too. Microsoft and Valve might tolerate that, because they are well-known but smaller companies would suffer and call on the EU to demand that it go back to the old method. But Apple would say, "We are just treating everyone equally."

    The truth is that the EU wants Apple's software treated "less than equally" and they are camouflaging it as "fairness."

    I demand that Apple fight back. And one way Apple can fight back now is by permanently banning all products from Epic and Spotify. I've just had enough of it. Apple has no obligation to let these idiots on their stores. I hate when Apple shows a complete lack of courage.
    edited December 2020 aderutter
  • Reply 14 of 28
    I feel bad for my Euro brothers and sisters in Tech. Yet another politician basically admitting you can’t compete and Apple needs to ‘control itself’ so you might have a chance. 

    Vestager has no clue how business works. Apple or any other company, is under no obligation to slow down to allow others to catch up. A quick search would inform her how many companies around the world are able to reach their audience through the Apple ecosystem and how much revenue they generate.  
  • Reply 15 of 28
    crowleycrowley Posts: 8,164member
    Apple or any other company, is under no obligation to slow down to allow others to catch up. 
    No one is saying that they need to slow down, just that as platform owners they have an advantage in upselling to their own services that compete with third parties, and that this position can lead to anticompetitive practices.

    Apple are under an obligation to offer a competitive playing field if the law says they have to.
  • Reply 16 of 28
    dewmedewme Posts: 3,680member
    These regulatory agencies have been caught completely off guard because they don’t understand the markets they are trying to regulate. They are treating Apple, Amazon, Google, etc., like they would treat the oil, steel, and railroad barons of the late 19th and early 20th century. They fundamentally do not understand network effects on the one hand and fail to recognize the tenuous nature of the stickiness that the current “platform” owners really have, something that can unravel all of these so called platforms in very short order.

    The traditional platform owners controlled things like natural resources, land, rights of way, physical infrastructure, physical access to markets, licensing codified in laws, transportation systems, etc. Breaking the stickiness of traditional platforms meant replacing or displacing vast infrastructure and wresting political control from well entrenched elites who were in the pockets of those who called the shots. Today’s platform owners pale in comparison and have teflon like stickiness that can crumble in a heartbeat as soon as something better, cooler, and more in tune with the demographics driving purchase decisions arrives on the scene. Apple and Amazon don’t have to carve out or control vast infrastructure assets, resources, or deploy armies of lobbyists to lock in their platforms and exert their dominance. If Apple loses its “coolness” in a particular market they can wither and die in that market no time flat.

    The old style platforms, like railroads and utilities, were very expensive and time consuming to establish and equally difficult to disassemble. Modern platforms like Facebook, Twitter, and the App Store were not difficult to build out, by comparison, they went up pretty quickly and could be disassembled just as easily. Nobody’s properties were taken over by eminent domain, nobody’s homes were bulldozed to lay down tracks, and nobody has to think about how to deal with the blight that ensues when the old infrastructure is abandoned. Facebook or the App Store would go away in a poof of virtual smoke. Easy come, easy go.

    The valued asset in the App Store is the intellectual property represented in the apps themselves. Apple doesn’t own that, the individual developers do. The App Store is nothing like a coal mine where the valued asset is owned by the owner of the mine, who may also own or have a stake the rail system needed to move the coal. If the App Store vanishes, the intellectual property owners still have their assets and can move them to a new store.

    Regulators and backward thinkers see the explosive growth of platforms like Facebook, Twitter, and the App Store and draw a false equivalence to monopolies of the past simply because of the sheer magnitude of the consumers seemingly locked into these platforms. The numbers appear huge, and they are, but the regulators are using the the wrong measuring sticks because they don’t understand network effects and are bedazzled by big numbers. They need to recalibrate to understand the new realities of new markets that are not constrained by traditional impediments to growth or traditional thinking. They are riding on the slow train of backward thinking and outdated expectations.  

     
    edited December 2020
  • Reply 17 of 28
    crowleycrowley Posts: 8,164member
    dewme said:
    These regulatory agencies have been caught completely off guard because they don’t understand the markets they are trying to regulate. They are treating Apple, Amazon, Google, etc., like they would treat the oil, steel, and railroad barons of the late 19th and early 20th century. They fundamentally do not understand network effects on the one hand and fail to recognize the tenuous nature of the stickiness that the current “platform” owners really have, something that can unravel all of these so called platforms in very short order.

    The traditional platform owners controlled things like natural resources, land, rights of way, physical infrastructure, physical access to markets, licensing codified in laws, transportation systems, etc. Breaking the stickiness of traditional platforms meant replacing or displacing vast infrastructure and wresting political control from well entrenched elites who were in the pockets of those who called the shots. Today’s platform owners pale in comparison and have teflon like stickiness that can crumble in a heartbeat as soon as something better, cooler, and more in tune with the demographics driving purchase decisions arrives on the scene. Apple and Amazon don’t have to carve out or control vast infrastructure assets, resources, or deploy armies of lobbyists to lock in their platforms and exert their dominance. If Apple loses its “coolness” in a particular market they can wither and die in that market no time flat.

    The old style platforms, like railroads and utilities, were very expensive and time consuming to establish and equally difficult to disassemble. Modern platforms like Facebook, Twitter, and the App Store were not difficult to build out, by comparison, they went up pretty quickly and could be disassembled just as easily. Nobody’s properties were taken over by eminent domain, nobody’s homes were bulldozed to lay down tracks, and nobody has to think about how to deal with the blight that ensues when the old infrastructure is abandoned. Facebook or the App Store would go away in a poof of virtual smoke. Easy come, easy go.

    The valued asset in the App Store is the intellectual property represented in the apps themselves. Apple doesn’t own that, the individual developers do. The App Store is nothing like a coal mine where the valued asset is owned by the owner of the mine, who may also own or have a stake the rail system needed to move the coal. If the App Store vanishes, the intellectual property owners still have their assets and can move them to a new store.

    Regulators and backward thinkers see the explosive growth of platforms like Facebook, Twitter, and the App Store and draw a false equivalence to monopolies of the past simply because of the sheer magnitude of the consumers seemingly locked into these platforms. The numbers appear huge, and they are, but the regulators are using the the wrong measuring sticks because they don’t understand network effects and are bedazzled by big numbers. They need to recalibrate to understand the new realities of new markets that are not constrained by traditional impediments to growth or traditional thinking. They are riding on the slow train of backward thinking and outdated expectations.   
    An interesting perspective, but why do you think it makes any practical difference to the need for regulation and the current attitude of regulators?  Why wouldn't the rules that they're seeking to apply work, and what would?
  • Reply 18 of 28
    dewmedewme Posts: 3,680member
    crowley said:
    dewme said:
    These regulatory agencies have been caught completely off guard because they don’t understand the markets they are trying to regulate. They are treating Apple, Amazon, Google, etc., like they would treat the oil, steel, and railroad barons of the late 19th and early 20th century. They fundamentally do not understand network effects on the one hand and fail to recognize the tenuous nature of the stickiness that the current “platform” owners really have, something that can unravel all of these so called platforms in very short order.

    The traditional platform owners controlled things like natural resources, land, rights of way, physical infrastructure, physical access to markets, licensing codified in laws, transportation systems, etc. Breaking the stickiness of traditional platforms meant replacing or displacing vast infrastructure and wresting political control from well entrenched elites who were in the pockets of those who called the shots. Today’s platform owners pale in comparison and have teflon like stickiness that can crumble in a heartbeat as soon as something better, cooler, and more in tune with the demographics driving purchase decisions arrives on the scene. Apple and Amazon don’t have to carve out or control vast infrastructure assets, resources, or deploy armies of lobbyists to lock in their platforms and exert their dominance. If Apple loses its “coolness” in a particular market they can wither and die in that market no time flat.

    The old style platforms, like railroads and utilities, were very expensive and time consuming to establish and equally difficult to disassemble. Modern platforms like Facebook, Twitter, and the App Store were not difficult to build out, by comparison, they went up pretty quickly and could be disassembled just as easily. Nobody’s properties were taken over by eminent domain, nobody’s homes were bulldozed to lay down tracks, and nobody has to think about how to deal with the blight that ensues when the old infrastructure is abandoned. Facebook or the App Store would go away in a poof of virtual smoke. Easy come, easy go.

    The valued asset in the App Store is the intellectual property represented in the apps themselves. Apple doesn’t own that, the individual developers do. The App Store is nothing like a coal mine where the valued asset is owned by the owner of the mine, who may also own or have a stake the rail system needed to move the coal. If the App Store vanishes, the intellectual property owners still have their assets and can move them to a new store.

    Regulators and backward thinkers see the explosive growth of platforms like Facebook, Twitter, and the App Store and draw a false equivalence to monopolies of the past simply because of the sheer magnitude of the consumers seemingly locked into these platforms. The numbers appear huge, and they are, but the regulators are using the the wrong measuring sticks because they don’t understand network effects and are bedazzled by big numbers. They need to recalibrate to understand the new realities of new markets that are not constrained by traditional impediments to growth or traditional thinking. They are riding on the slow train of backward thinking and outdated expectations.   
    An interesting perspective, but why do you think it makes any practical difference to the need for regulation and the current attitude of regulators?  Why wouldn't the rules that they're seeking to apply work, and what would?
    I see no need for regulation at this time and believe that regulators are overstepping their authority because they don't fully understand the market and volatility of the competitive landscape. The App Store, Facebook, Twitter, etc., could evaporate as quickly as they evolved. The rules that are being proposed are on the path to nationalizing the private investments of corporations, which I'm not a fan of because I believe it stifles innovation, but I understand such a move is always subject for debate in liberal democracies. I'm actually more concerned about moving to nationalize, codify, and establish regulations around the current platforms at a time we are just beginning to understand what these network dominated platforms are capable of achieving. This would, in my opinion, lock us into the current models and remove incentives for up-and-coming innovators and disruptors to take a big swing at knocking off the current dominant players. To me this is like saying "game over" when I believe we should be saying "game on." 
    magman1979
  • Reply 19 of 28
    22july201322july2013 Posts: 2,391member
    crowley said:
    Apple are under an obligation to offer a competitive playing field if the law says they have to.
    I agree that the law can say whatever it wants. Especially in dictatorships. But Apple doesn't have to sell anything in a dictatorship and nobody can force Apple to. (I wonder how many dictatorships Apple currently does business in.) If the EU wants to dictate and micromanage every term in Apple's terms of service, Apple should just leave.

    This is just one salvo by the EU in a never-ending salvo of attempts to control the marketplace to favour the local market's produce. It's the EU's right to demand an imbalance, but it's Apple right to leave the market.
    magman1979
  • Reply 20 of 28
    avon b7avon b7 Posts: 5,807member
    I feel bad for my Euro brothers and sisters in Tech. Yet another politician basically admitting you can’t compete and Apple needs to ‘control itself’ so you might have a chance. 

    Vestager has no clue how business works. Apple or any other company, is under no obligation to slow down to allow others to catch up. A quick search would inform her how many companies around the world are able to reach their audience through the Apple ecosystem and how much revenue they generate.  
    That is nonsense. These proposals go through consultation at ALL levels. Right down to the consumer. 

    It's clear you're not going to please everyone but let's not go overboard. 
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