Time for our government to stand up for our companies. This reeks of extortion. The Biden administration needs to go to bat for Apple in whatever ways are legal and proportionate. Perhaps a tariff on EU goods and services that are in the same arena as Apple? Perhaps a fine for whatever they do that we don’t like? Something. This cannot stand.
It's interesting that Apple will do whatever the Chinese government wants without uttering a peep, but they whine kicking and screaming about any regulation whatsoever in the EU. I say this as an AAPL investor as well as a user, but Apple management really seems to have a problem reading the room sometimes. Anyone could see this was coming, but Apple seems to want to cling onto their precious App Store margins no matter what; it's as if they know the hardware revenue is going to slow down and they are scrambling to do anything to maintain revenue. In the long term, I think this is going to hurt Apple, as they could give up some the services margin in exchange for good will with developers and government regulated markets and be better off down the road. Right now they are just alienating a lot of people by digging their heels in, and they still don't have a modem of their own, and their software stack is a mess.
The Chinese don't pretend the EU and the US Justice Department say their motivation is the common citizen but the only time they do anything is when moneyed interests egg them on and they then self congratulate themselves afterward. The EU like the UK Brexit has put a tech fork in the road that will only get bigger.
The EU & the EU commission are just anti consumer corrupt bureaucrats. They should be fining Spotify, for not passing on the savings to their customers, that Apple allowed them to make, by not charging their usual commision 😡 Apple should kick Spotify off the App Store in Europe and the rest of the world!
The US should really should be targeting European companies that do significant business in the US and start finding (or making up) reasons to issue significant fines and other penalties. Every time the EU targets an American-based company, the US should do the same. Time to start putting some retaliatory pressure on the EU.
Our market is much too important to the US.
Our iPhones will work differently from the US iPhones.
We'll have more options and more freedom to choose.
Sorry. The European market is not a major consumer of US-based products outside of food and tech. Not sure how well BMW or Daimler or Airbus or Siemens or the French wine industry would feel about being targeted in one way or another. I generally dislike the idea of tariffs as they only hurt consumers, but inflicting retaliatory pain on European companies so they begin to influence EU decisions is fair game.
explicitly accepting that Apple will take a cut (commission, fee or whatever you want to call it) of every transaction the consumer makes. That, after all is what Apple wants: its part of the pie.
Like EVERY major retailer on the face of the planet.
"Today's decision concludes that Apple's anti-steering provisions amount to unfair trading conditions, in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU'). These anti-steering provisions are neither necessary nor proportionate for the protection of Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and negatively affect the interests of iOS users, who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device.
Apple's conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.
... "
Apple makes no reference to its anti-competitive behaviour in its statement and instead tries to put the spotlight on Spotify, its European nature and music streaming.
That’s because it’s absurd for the company that holds more than half the market to accuse another company that has a much smaller market share of “anti-competitive behavior” in that market. It becomes doubly absurd when you consider that much of that market wouldn’t even exist without the mobile platform created by Apple and then copied by its competitors.
When Spotify launched in 2006, streaming music was limited primarily to stationary, plugged-in computers. There were mp3 players and iPods that made downloaded music portable, but Apple had to invent the iPhone, push phone companies into broadband, and then introduce the App Store for Spotify to become relevant. Samsung, Google and others followed, expanding Spotify’s opportunities for riding the broadband mobile platform wave.
Spotify then used that platform to disrupt the purchased digital music market, and Apple supplanted iTunes with Apple Music in response.
As with Epic, Spotify just wants a free ride. That’s what this is all about.
Honestly, when you add to this the fact that Spotify also notoriously pays artists significantly less for their content than Apple, they come off as pretty parasitic, when you think about it.
Marketshare has little to do with anti-competitive behaviour or the fines.
One of my old clients (plastics industry) received and invite to a meeting of the main industry players (worldwide players) in the field. I think the meeting took place in Germany.
Once there it quickly became clear that the agenda was an attempt at price fixing. My client quickly pulled out, not wanting anything to do with it.
The company proposing all this was from the US.
That same company (probably seeing the risks) reported the meeting to the EU and my client got a multi million euro fine - just for being there.
The US company escaped a fine as it was the whistleblower. Isn't that ironic!?
The fine stood. However the client did not hold a dominant (or even near dominant position in the industry).
Which part of anti-steering within the context of a multi billion dollar app store business was not anti-competitive?
Your price-fixing cartel example is not analogous to this case. Your client was fined for attending a price-fixing meeting. Was that fair? Who knows? But it has nothing to do with their relative market share or this case.
Once again: this is about Spotify seeking a free ride. This case is about a huge fine resulting because Spotify, the company with more than half the music-streaming market share, lodging a complaint about Apple, a company that has comparatively small market share, alleging that Apple was guilty of "anti-competitive practices." Comparative market share is very relevant to this question.
Somebody can correct me if I'm wrong, but Spotify gets access to create and distribute its app on iOS for $99 per year. If there were no platform, there would be no customers. They get access to millions of customers for $99. And Apple is being "anti-competitive" because those customers had to find Spotify's website on their own if they wanted to purchase a paid subscription directly from Spotify, with no more money going to Apple, beyond that $99, one-time-per-year developer fee. I don't think so.
explicitly accepting that Apple will take a cut (commission, fee or whatever you want to call it) of every transaction the consumer makes. That, after all is what Apple wants: its part of the pie.
Like EVERY major retailer on the face of the planet.
Except EVERY major retailer does not try to take a cut from every transaction in the mall (to use a well worn but often flawed analogy).
The EU & the EU commission are just anti consumer corrupt bureaucrats.
Same tired story. Last year EU politicians were "modern communists" (Apple is selling a lot to those... in China). Now they are "corrupt bureaucrats". 11 EU countries are ahead of US when it comes to corruption and the 2 least corrupt countries globally are both members of the EU. It isn't even about US companies: https://competition-policy.ec.europa.eu/antitrust-and-cartels/cartels-cases-and-statistics_en - year by year... from ethanol to batteries in cars.
Would be nice if Apple could stop this behavior and do the right thing. Fighting Spotify and other app developers is stupid. iOS wouldn't be a great platform without app developers. Great apps help sell devices.
The US should really should be targeting European companies that do significant business in the US and start finding (or making up) reasons to issue significant fines and other penalties. Every time the EU targets an American-based company, the US should do the same. Time to start putting some retaliatory pressure on the EU.
Our market is much too important to the US.
Our iPhones will work differently from the US iPhones.
We'll have more options and more freedom to choose.
Sorry. The European market is not a major consumer of US-based products outside of food and tech. Not sure how well BMW or Daimler or Airbus or Siemens or the French wine industry would feel about being targeted in one way or another. I generally dislike the idea of tariffs as they only hurt consumers, but inflicting retaliatory pain on European companies so they begin to influence EU decisions is fair game.
a) Europe accounts for about a QUARTER of Apple's global revenue. Not sure how you consider that "not major".
b) Every single European manufacturer is subject to US market regulations when they wish to sell anything there. That's how laws work.
Hahaha. The EU still missing the UK contribution so finding new ways to steal off successful companies. How else will they pay for the waves of illegal immigration? Putrid organisation, well rid.
explicitly accepting that Apple will take a cut (commission, fee or whatever you want to call it) of every transaction the consumer makes. That, after all is what Apple wants: its part of the pie.
Like EVERY major retailer on the face of the planet.
Except EVERY major retailer does not try to take a cut from every transaction in the mall (to use a well worn but often flawed analogy).
The well-worn analogy is comparing the App Store to a store, not a mall. Most stores do prefer to take a cut from every transaction in the store. Perhaps this is surprising, but that's actually how retail stores work. Apart from occasionally letting Girl Scouts sell cookies out front, most stores do not allow independent businesses to set up shop inside their store with a separate point of sale system. Starbucks and CVS happen inside your local Target, but you'll notice that you can ring up your Target purchases at their registers, because they're using the main store's system for their transactions. Though technology could easily make it possible, few retail stores would let you pick up merchandise, scan the UPC code to pay the manufacturer directly and walk out of the store with the item.
This is because the store itself adds value to the products stocked on its shelves. Retail stores go to considerable expense creating brand recognition and trust relationships with customers, as well as building physical retail locations, setting up inventory systems and point-of-sale systems, and in training staff to make the retail experience what it is as well as to provide customer service. People will choose to buy the same products at one retail location over another not only because of real or perceived price differences, but because of the retail experience itself. Customers will even go to a retailer with higher markups if they prefer the customer experience or have confidence that the retailer will accept returns or otherwise resolve issues that the customer would prefer not to take up with the manufacturer. Better retailers benefit manufacturers by drawing custromer foot traffic in, and generating sales that otherwise would never happen. These are all things analogous to customer preferences in the Apple App store.
As for malls, they don't generally take a cut from each transaction, but they sure as heck charge rent. Even those little kiosks selling phone cases and cologne pay rent to the mall owner. Also, the mall owner sets rules, requirements and standards of operation for its tenants, in order to assure that they're not abusing customers or selling things that will damage or destroy the mall. So the mall analogy might relate to what the EU is forcing Apple to do, but you'll see from that analogy that Apple is absolutely justified in setting high standards and collecting revenue from third-party app stores setting up shop on their platform.
Imagine Epic sending personnel into the Berlin Apple Store to sell gift cards for in-app Fortnite weapons or ammunition or whatever, with the Epic employees directly accepting digital payments for those things. Imagine Spotify doing the same with Spotify subscription gift cards. Here's a thirty euro gift card. Scan here to pay Spotify directly. Would any reasonable person expect Apple to allow these companies to do that inside the Apple Store? Would it seem absurd for the EU to demand that they do so?
explicitly accepting that Apple will take a cut (commission, fee or whatever you want to call it) of every transaction the consumer makes. That, after all is what Apple wants: its part of the pie.
Like EVERY major retailer on the face of the planet.
Except EVERY major retailer does not try to take a cut from every transaction in the mall (to use a well worn but often flawed analogy).
The well-worn analogy is comparing the App Store to a store, not a mall. Most stores do prefer to take a cut from every transaction in the store. Perhaps this is surprising, but that's actually how retail stores work. Apart from occasionally letting Girl Scouts sell cookies out front, most stores do not allow independent businesses to set up shop inside their store with a separate point of sale system. Starbucks and CVS happen inside your local Target, but you'll notice that you can ring up your Target purchases at their registers, because they're using the main store's system for their transactions. Though technology could easily make it possible, few retail stores would let you pick up merchandise, scan the UPC code to pay the manufacturer directly and walk out of the store with the item.
As for malls, they don't generally take a cut from each transaction, but they sure as heck charge rent. Even those little kiosks selling phone cases and cologne pay rent to the mall owner. Also, the mall owner sets rules, requirements and standards of operation for its tenants, in order to assure that they're not abusing customers or selling things that will damage or destroy the mall. So the mall analogy might relate to what the EU is forcing Apple to do, but you'll see from that analogy that Apple is absolutely justified in setting high standards and collecting revenue from third-party app stores setting up shop on their platform.
The point was That, depending on which analogy you run with, Apple owns the mall, and takes a cut out of every transaction within it because all the 'stores' are Apple Stores.
Hahaha. The EU still missing the UK contribution so finding new ways to steal off successful companies. How else will they pay for the waves of illegal immigration? Putrid organisation, well rid.
Brexit was the best "UK contribution" ever. The number of job openings in London banking has dropped 79% after Brexit and headlines like "Stagnant UK economy lacking behind EU" are telling the true story. Investments and good jobs are bleeding out of UK. Just check the current trade deficit. It is around $100 billion. That is a lot of "from all of UK to all of EU" money every year. Not likely to stop.
As for the topic... what is wrong with management in Cupertino? The stock has lost nearly 6% in 2 months and we keep getting stories where Apple management is acting too late on legal issues and projects.
Fined for not allowing developers to tell users there are other options for music streaming isn’t it the users find other options that’s available on the App Store just type in your music streaming service and download.
So does this mean Spotify will now be required to put information and links on their website and apps to let their users know that they can also purchase streaming services on Apple Music and other streaming services? There’s probably millions of EU citizens that have no idea of the existence of any alternatives to Spotify. Sure…
Yeah, this is pure protectionism. I know there’s a lot of folks that will parrot the same list of rules, regulations, and laws that Apple is supposedly violating. But remember that the same folks who are coming after Apple and other highly successful and self-made companies that are not in the EU for massive cash payouts are the same ones who crafted those rules, regulations, and laws. I suspect that the the laws that the EU created were meticulously and precisely crafted to target Apple and other high value non-EU companies. If you make the rules specifically to advance your own position and enforce financial penalties against specific companies or individuals for noncompliance, well that is what is called extortion, at least outside of the EU.
Where’s the big EU company that is competing with Apple in the same markets that Apple competes in? There aren’t any. Why? So with a lack of an ability to compete for customers based on innovation and value they create regulations, enact laws, and prescribe penalties - all of which they created to weaponize their legal system for lack of being able to compete on a level playing field. If you’re an app developer and you’re not happy with the terms & conditions that Apple defines for Apple’s system, one that was created at great expense, go talk to another system owner. Nobody is forced to partner with Apple. Find someone else or build your own system. Apple is not a public utility created using public funds. It’s not a cartel of one either. Nobody is required to use a single piece of Apple hardware, software, media, or whatever. Don’t like it, don’t like the terms & conditions, don’t like that it’s not homegrown? Find someone else who is more compatible with your needs and quit trying to fix something you don’t own that’s not broken.
The EU does not generate enough profit for Apple to be happy about a $2B fine. That is going to hurt. Why for all this, when Apple was responding to DMA and making accommodations for their anti steering practices?... Because Margrethe Vestager is still very angry from losing the Irish tax case, which was over ruled on appeal as it did not provide proof of wrong doing. I think on appeal the same could happen here, as the EU commission is not the same as EU courts which adhere to the law and not vendetta driven. Apple could have allowed more information to music customers of course, but Spotify and Daniel Ek are nasty pieces in this. US tech companies have every right to become paranoid about future business in the EU, as clearly they are being targeted, to the advantage of EU companies. The corruption is obvious imo, but I suppose that is what businesses are all about. In the future, I doubt Apple will leave the EU, but certainly the products and services in the EU will differ, and likely will be more expensive.
I've long held that Apple should begin to manufacture devices for highly regulated markets like the EU which comply with EC regulations and are released some time after Apple releases their world market devices at a higher price to accommodate the additional engineering costs. They could also tack on regulatory fine costs and spread them over the EU devices uniformly.
This would mean that when the EC comes up with bonkers design decisions like all devices need replaceable batteries the whole world won't have to suffer with phones that aren't waterproof or lack inductive charging because a battery and cover being where the inductive charging coil currently sit today.
Of course, Europeans could still try and smuggle in grey market world phones, but that's a matter for the EU and their enforcement agencies to try to stop.
Everyone outside of these regulated countries could also buy the regulated phone but chances are they'd opt for the cheaper world phone (unless for some perverse reason you had the need to carry around a phone with a bunch of replaceable batteries).
IOW, just treat the Europeans and their demands as a cost of doing business, and have a side engineering department whose sole job is refitting a higher cost European iPhone to satisfy the more restrictive European market. Heck, the European phones could even be manufactured in the EU which would contribute to an even higher cost but would keep EU regulators happy.
"Today's decision concludes that Apple's anti-steering provisions amount to unfair trading conditions, in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU'). These anti-steering provisions are neither necessary nor proportionate for the protection of Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and negatively affect the interests of iOS users, who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device.
Apple's conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.
... "
Apple makes no reference to its anti-competitive behaviour in its statement and instead tries to put the spotlight on Spotify, its European nature and music streaming.
Exactly, because this decision is based on supporting Spotify and a general Euro-jealousy of how successful US tech firms are.
Comments
Spotify has already gotten a massive free ride see Apples post https://www.apple.com/newsroom/2024/03/the-app-store-spotify-and-europes-thriving-digital-music-market/
They should be fining Spotify, for not passing on the savings to their customers, that Apple allowed them to make, by not charging their usual commision 😡
Apple should kick Spotify off the App Store in Europe and the rest of the world!
Sorry. The European market is not a major consumer of US-based products outside of food and tech. Not sure how well BMW or Daimler or Airbus or Siemens or the French wine industry would feel about being targeted in one way or another. I generally dislike the idea of tariffs as they only hurt consumers, but inflicting retaliatory pain on European companies so they begin to influence EU decisions is fair game.
Somebody can correct me if I'm wrong, but Spotify gets access to create and distribute its app on iOS for $99 per year. If there were no platform, there would be no customers. They get access to millions of customers for $99. And Apple is being "anti-competitive" because those customers had to find Spotify's website on their own if they wanted to purchase a paid subscription directly from Spotify, with no more money going to Apple, beyond that $99, one-time-per-year developer fee. I don't think so.
Would be nice if Apple could stop this behavior and do the right thing. Fighting Spotify and other app developers is stupid. iOS wouldn't be a great platform without app developers. Great apps help sell devices.
This is because the store itself adds value to the products stocked on its shelves. Retail stores go to considerable expense creating brand recognition and trust relationships with customers, as well as building physical retail locations, setting up inventory systems and point-of-sale systems, and in training staff to make the retail experience what it is as well as to provide customer service. People will choose to buy the same products at one retail location over another not only because of real or perceived price differences, but because of the retail experience itself. Customers will even go to a retailer with higher markups if they prefer the customer experience or have confidence that the retailer will accept returns or otherwise resolve issues that the customer would prefer not to take up with the manufacturer. Better retailers benefit manufacturers by drawing custromer foot traffic in, and generating sales that otherwise would never happen. These are all things analogous to customer preferences in the Apple App store.
As for malls, they don't generally take a cut from each transaction, but they sure as heck charge rent. Even those little kiosks selling phone cases and cologne pay rent to the mall owner. Also, the mall owner sets rules, requirements and standards of operation for its tenants, in order to assure that they're not abusing customers or selling things that will damage or destroy the mall. So the mall analogy might relate to what the EU is forcing Apple to do, but you'll see from that analogy that Apple is absolutely justified in setting high standards and collecting revenue from third-party app stores setting up shop on their platform.
Imagine Epic sending personnel into the Berlin Apple Store to sell gift cards for in-app Fortnite weapons or ammunition or whatever, with the Epic employees directly accepting digital payments for those things. Imagine Spotify doing the same with Spotify subscription gift cards. Here's a thirty euro gift card. Scan here to pay Spotify directly. Would any reasonable person expect Apple to allow these companies to do that inside the Apple Store? Would it seem absurd for the EU to demand that they do so?
As for the topic... what is wrong with management in Cupertino? The stock has lost nearly 6% in 2 months and we keep getting stories where Apple management is acting too late on legal issues and projects.
Yeah, this is pure protectionism. I know there’s a lot of folks that will parrot the same list of rules, regulations, and laws that Apple is supposedly violating. But remember that the same folks who are coming after Apple and other highly successful and self-made companies that are not in the EU for massive cash payouts are the same ones who crafted those rules, regulations, and laws. I suspect that the the laws that the EU created were meticulously and precisely crafted to target Apple and other high value non-EU companies. If you make the rules specifically to advance your own position and enforce financial penalties against specific companies or individuals for noncompliance, well that is what is called extortion, at least outside of the EU.
Where’s the big EU company that is competing with Apple in the same markets that Apple competes in? There aren’t any. Why? So with a lack of an ability to compete for customers based on innovation and value they create regulations, enact laws, and prescribe penalties - all of which they created to weaponize their legal system for lack of being able to compete on a level playing field. If you’re an app developer and you’re not happy with the terms & conditions that Apple defines for Apple’s system, one that was created at great expense, go talk to another system owner. Nobody is forced to partner with Apple. Find someone else or build your own system. Apple is not a public utility created using public funds. It’s not a cartel of one either. Nobody is required to use a single piece of Apple hardware, software, media, or whatever. Don’t like it, don’t like the terms & conditions, don’t like that it’s not homegrown? Find someone else who is more compatible with your needs and quit trying to fix something you don’t own that’s not broken.
This would mean that when the EC comes up with bonkers design decisions like all devices need replaceable batteries the whole world won't have to suffer with phones that aren't waterproof or lack inductive charging because a battery and cover being where the inductive charging coil currently sit today.
Of course, Europeans could still try and smuggle in grey market world phones, but that's a matter for the EU and their enforcement agencies to try to stop.
Everyone outside of these regulated countries could also buy the regulated phone but chances are they'd opt for the cheaper world phone (unless for some perverse reason you had the need to carry around a phone with a bunch of replaceable batteries).
IOW, just treat the Europeans and their demands as a cost of doing business, and have a side engineering department whose sole job is refitting a higher cost European iPhone to satisfy the more restrictive European market. Heck, the European phones could even be manufactured in the EU which would contribute to an even higher cost but would keep EU regulators happy.