'Strong action' is coming if the EU doesn't like Apple's App Store concessions

AppleInsider

A European Commissioner has laid down the law, and has declared that Apple will be the target of "strong action" if its compliance with the Digital Markets Act isn't enough.

App Store icon

The EU Digital Markets Act will come into effect in March, and Apple has advised of the changes it will make to comply. While those plans have gathered complaints, the EU itself has warned that Apple faces the prospect of penalties if it fails to do enough to comply with the new rules.

The European Commissioner for Internal Market Thierry Breton told Reuters "The DMA will open the gates of the internet to competition so that digital markets are fair and open. Change is already happening."

Regulators will assess proposals with feedback from third parties starting from March 7, Breton continued. "If the proposed solutions are not good enough, we will not hesitate to take strong action."

Bretton's comments are a warning to Apple and others that there is the possibility of penalties if their proposals don't do enough to meet the terms of DMA. However they do not directly comment on what has been announced.

A spokesperson for the European Commission was similarly careful with their wording, acknowledging Apple's announcements ahead of the March 7 compliance deadline, but declined to comment about them. "We strongly encourage designated gatekeepers to test their proposals with third parties," they added.

Apple's Plans and complaints

On January 25, Apple revealed its changes that will come into effect from March 2024 to comply with DMA. For all users, Apple will start to notarize all iOS apps, regardless of where they're sold.

Developers will be able to offer their own app marketplace in the EU, but they must be approved by Apple and use a human review process, Those stores are also responsible for their own refunds, but they can use alternative third-party payment processors.

At the same time, Apple is changing its fee structure, reducing the standard commission of 30% down to 17%. For apps that stay within the App Store, there will also be a 3% fee for using Apple's payment processing services.

Controversially, all apps not sold via the App Store will be subject to a Core Technology Fee of 0.50 Euro per first-install of an app annually, waived for the first million installs.

Apple's proposals have, naturally, attracted complaints. Spotify CEO Daniel Ek called the fees "extortion, plain and simple," while Epic Games CEO Tim Sweeney referred to it as "hot garbage" and a "devious new instance of malicious compliance."



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pwrmac

For the complainers it is all about money.. get a free ride. I do not think the EU can force a commercial company to use tarrifs for their services. Maybe a price cap but that's it.

rax_mark

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

red oak

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that? 

Laws are written.  Apple followed every letter of the law 

sirdir

red oak said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that? 

Laws are written.  Apple followed every letter of the law 

They should get as much say in what is installed and paid as much as Microsoft gets paid when I install a Program outside the store on my PC or as much as Apple gets paid when I install a mac App outside the App Store. Free our devices from the tyranny of Apple (only mildly exaggerating)

avon b7

red oak said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that? 

Laws are written.  Apple followed every letter of the law 

They only did that under pressure from the likes of the EU. 

NFC should never have been restricted in the first place. How has everyone else managed to open it up without issue? 

The main reason Apple has restricted competition is for its own gain, and while you may disagree, the spirit of the law is something that should be clear to anyone, and Apple clearly isn't playing along in that regard. Apple will surrender the minimum possible until it complies. That is perhaps the nature of the game and understandable to a point but consumers are being harmed and Apple is very aware of public opinion. If that sways, it will not be good. 

If this gets escalated to the EU's higher courts, it is very likely that Apple will come out worse for wear. Just ask the banks. 

rax_mark

red oak said:

Spoken like a true socialist

I believe in a healthy mixture of Capitalism and Socialism. Following only one to the letter is stupid and is detached from reality.

red oak said:

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store

All of which they were compelled to do due to regulation, not out of a spirit for fair competition. The new app store policies that allow distribution of apps outside the iOS app store were made in such a way to make the process almost impossible to do monetarily while still being a gatekeeper to that process.

red oak said:

do you think Apple should get zero compensation for that?

Isn't over 50% margin on the sale of iPhones compensation? Apple makes so much money on iphones alone that those profits should be able to fund all of their other hardware projects and software departments and even R&D. Airpods, Macs and watches don't hold a candle to the profit they make on iPhones. They could give free Airpods with iPhones and still make profit (this data is publicly available).

Yet, Apple double dips (yearly developer program charges), triple dips (monthly 30% cut from developers), and is now planning to quad dip (core technology charges). At one point, intervention was inevitable, I only thought it would be developers protesting instead of government regulation. However, even with regulation they will make record profits on hardware sales. I don't think they are in a position to sympathize with.

red oak

rax_mark said:

red oak said:

Spoken like a true socialist

I believe in a healthy mixture of Capitalism and Socialism. Following only one to the letter is stupid and is detached from reality.

red oak said:

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store

All of which they were compelled to do due to regulation, not out of a spirit for fair competition. The new app store policies that allow distribution of apps outside the iOS app store were made in such a way to make the process almost impossible to do monetarily while still being a gatekeeper to that process.

red oak said:

do you think Apple should get zero compensation for that?

Isn't over 50% margin on the sale of iPhones compensation? Apple makes so much money on iphones alone that those profits should be able to fund all of their other hardware projects and software departments and even R&D. Airpods, Macs and watches don't hold a candle to the profit they make on iPhones. They could give free Airpods with iPhones and still make profit (this data is publicly available).

Yet, Apple double dips (yearly developer program charges), triple dips (monthly 30% cut from developers), and is now planning to quad dip (core technology charges). At one point, intervention was inevitable, I only thought it would be developers protesting instead of government regulation. However, even with regulation they will make record profits on hardware sales. I don't think they are in a position to sympathize with.

Did you join an hour ago here so you can argue for Spotify?  

Apple did everything the DMA required.  Every single thing.  Let it go back to the courts, then to appeal, and then finally to the Court of Justice.    Maybe we'll have some clarification in 2027.  Until then,  Apple's business terms apply 

mikethemartian

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

I’m far from someone who regularly defends Apple but it would be untenable for a legal system to enforce “the spirit of the law” rather than the actual letter of the law. Technical compliance is compliance. If the EU government doesn’t like it then they need to change the law again to close the loopholes. The government had complete control on exactly what the law said. If they failed to account for certain contingencies then it is completely on them.

mac_dog

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

.

If you believe the US believes/follows the rule of the law, you must have your head buried in the sand. The spirit of the law is why there is no accountability in this country. Period. 

rax_mark

red oak said:

rax_mark said:

red oak said:

Spoken like a true socialist

I believe in a healthy mixture of Capitalism and Socialism. Following only one to the letter is stupid and is detached from reality.

red oak said:

Apple opened up the browser, NFC, and allows game streaming apps.  And, allows distributions of apps outside of the App Store

All of which they were compelled to do due to regulation, not out of a spirit for fair competition. The new app store policies that allow distribution of apps outside the iOS app store were made in such a way to make the process almost impossible to do monetarily while still being a gatekeeper to that process.

red oak said:

do you think Apple should get zero compensation for that?

Isn't over 50% margin on the sale of iPhones compensation? Apple makes so much money on iphones alone that those profits should be able to fund all of their other hardware projects and software departments and even R&D. Airpods, Macs and watches don't hold a candle to the profit they make on iPhones. They could give free Airpods with iPhones and still make profit (this data is publicly available).

Yet, Apple double dips (yearly developer program charges), triple dips (monthly 30% cut from developers), and is now planning to quad dip (core technology charges). At one point, intervention was inevitable, I only thought it would be developers protesting instead of government regulation. However, even with regulation they will make record profits on hardware sales. I don't think they are in a position to sympathize with.

Did you join an hour ago here so you can argue for Spotify?  

Apple did everything the DMA required.  Every single thing.  Let it go back to the courts, then to appeal, and then finally to the Court of Justice.    Maybe we'll have some clarification in 2027.  Until then,  Apple's business terms apply 

Yes, I did create this account today as I don't have access to my previous one.

However, that should be inconsequential to the statements I made and their validity.

We will know whether the new policies follow the DMA in March.

eriamjh

Was the spirit of the law access to iPhone hardware or through and App Store for free?
Is the letter of the law access to iPhone hardware or through and App Store for free?  
I don't think any company can or should be forced to give away access to its hardware or the tools to do so.   

iPhone isn't a Mac or a PC where one merely develops software that can be downloaded and installed by a user.  That's an older ecosystem fraught with privacy and security hazards.   That's why the iPhone is locked down (or at least one reason given).

I'm not saying Apple's charges for this side-loading is fair to everyone.  It's really hard to define "fair" because it's such a weasel word used by weasels who complain they're not getting something for free or for not letting them play in your sandbox and with your toys on your property on their schedule not yours, etc.

gatorguy

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Of course they can make a profit, a major profit in fact. Few people will sideload, and Google has managed quite a few billion in profit from the Play Store despite several 3rd party app stores on the Android platform. This is all about Apple muscle-flexing and not any signifcant danger to profits nor security IMO

jimh2

Core Technology Charge is the best solution. The 3rd party App Store people were out of their minds if they though they could pay $99 and that be all they paid to Apple. Just like everything else involving the government the side effects are never analyzed. There is no such thing as free in business nor will it be. 1/2 Euro is a pittance for what you can do.

danox

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Samsung, Microsoft and Google already have the EU market, but that isn't good enough they want it all. Apple hardware regionalized within the EU striped down to core Apple software without a open App Store  à la game consoles where every developer beyond Apple has to sit down and interview for a spot and then pay up front for being on the computer device?

Apple core software plus 5,000 apps coming up within the EU why they will not stop, get ready would you pay for core Apple ecosystem plus a choice of choosing from 5,000 highly curated (like Sony or Nintendo) apps that work without problems? Would you pay for Apple hardware, how many worthwhile pieces of software are there within each genre not counting games and a few utilities. Each genre other than games/utilities has maybe a dozen good apps at the most. I currently have 89 apps (includes iPad software) half are Apple core apps the others are name brand apps who due to their quality would pass any Apple job interview (Sony like curation) with Apple, and a few utilities. Look at what you have installed how many beyond the Apple core set of software do you have installed and use?

The very existence of the online Apple App Store is a courtesy not a right most of the software on the App Store is filler after the first 5,000 apps, not counting games and I like Apple products. Anyone claiming they have one million apps on their App Store doesn't mean they have one million good or even necessary  apps for the survival of the platform.

jimh2

The 15-30% commission is a business expense (cost of doing business). There are a myriad of other business expenses (payroll, state/local/federal taxes, unemployment insurance, computers, rent, labor, auto/travel, etc). Maybe these companies protesting the commission should protest take rates and expect someone else to pay their other business costs. 

jimh2

gatorguy said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Of course they can make a profit, a major profit in fact. Few people will sideload, and Google has managed quite a few billion in profit from the Play Store despite several 3rd party app stores on the Android platform. This is all about Apple muscle-flexing and not any significant danger to profits nor security IMO

Consumers are the only ones who stand to lose anything and no one will give up an Apple phone for an Android. EU citizens will not let this happen quietly and of course rendering millions of phones to be restricted to installed apps is the infinitely worse than having to throw away tens of millions of charging cables.

rax_mark

jimh2 said:

gatorguy said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Of course they can make a profit, a major profit in fact. Few people will sideload, and Google has managed quite a few billion in profit from the Play Store despite several 3rd party app stores on the Android platform. This is all about Apple muscle-flexing and not any significant danger to profits nor security IMO

Consumers are the only ones who stand to lose anything and no one will give up an Apple phone for an Android. EU citizens will not let this happen quietly and of course rendering millions of phones to be restricted to installed apps is the infinitely worse than having to throw away tens of millions of charging cables.

You overestimate the value Apple phones have to people outside the US. Most EU citizens see them as status symbols and there is public disdain (though often nothing more than jokes) for such people who try to flaunt wealth. It's a different culture to the US.

Also, people will simply switch to other top end manufacturers or most likely foldables which are also seen as premium devices due to their price tag.

I can assure you the number of people who will complain that their government banned a manufacturer that didn't comply with local regulations is going to be limited to forums and Reddit.

That's the same reason Apple is so careful with China, a state ban only affects the private company, as other competitors will jump in to fill the void. That's also the reason why Apple offers more discounts on their phones in China after the resurgence of Huawei.

shrave10

Any "strong action" by the EU vs. Apple will probably end up resulting in the break up of Spotify.  Big Three music labels all colluding to prop up a single music streamer is called price fixing.  Apple will surely retaliate.

shrave10

You overestimate the value Apple phones have to people outside the US. Most EU citizens see them as status symbols and there is public disdain (though often nothing more than jokes) for such people who try to flaunt wealth. It's a different culture to the US.

# You may be underestimating how Apple products work together so well with iCloud synching of photos, and all user data across their Apple devices

JamesCude

Such crybabies- here's a thought: If Apple were an EU company, it would never have been motivated to innovate such a robust and popular platform, and you morons would have nothing to "deregulate" and reap windfalls in taxes and "fees."