EU has very serious issues with Apple, says competition chief

Posted:
in iOS

Antitrust executive Margrethe Vestager says the EU has multiple issues over Apple's App Store and its alleged non-compliance with the region's new laws, and vows to enforce fines where necessary.

European Union flags fluttering with a backdrop of modern glass building facades.
EU flags in Brussels



It has previously been rumored that the European Union is about to issue a fine against Apple over its alleged continuing to block rivals from promoting alternative services. Now European Commissioner for Competition, Margrethe Vestager, has confirmed that the EU is investigating Apple.

"Well, we have a number of Apple issues [and] I find them very serious," she said on CNBC. I was very surprised that we would have such suspicions of Apple being non-compliant."

"I can say this is not what was expected of such a company," she continued. "Of course, we will enforce exactly with the same dedication and with the same top priority as with any other business."

While refusing to detail the issues, she said that an announcement would be made "hopefully soon." Vestager also said that the EU has five current cases against Big Tech firms, including Apple, with more in progress.

"I expected cases, I was a bit surprised that we would have so many cases so soon and more in the pipeline," she said. Vestager says she believes the Digital Markets Act (DMA) is directly affecting firms and their financial bottom line, and consequently she sees companies trying to evade the law.

Under the DMA, the EU has the power to levy a daily penalty of up to 5% of its average daily worldwide turnover. In Apple's case, that potentially means up to $1 billion every day.

The DMA also gives the EU the authority to force the breakup of companies. Vestager described this as meaning the EU has "a strong toolbox" of options with which to punish non-compliance, and says that the DMA will be enforced.

"It's only when you enforce that you change the law, the world," she said, "because only then do you change behavior."

The potential further fines against Apple follow the EU's fining it $2 billion over Apple allegedly favoring its own Apple Music over the vastly more popular Spotify. The EU has subsequently been reported to be investigating whether that fine made Apple change any of its practices.



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Comments

  • Reply 1 of 96
    Whenever the EU needs money for budget overruns they fine Apple or Google or some other large American company to cover it.  I hope Apple raises their prices in the EU to cover the fake fines.  
    davssfe119secondkox2williamlondonbshankwatto_cobra
  • Reply 2 of 96
    rob53rob53 Posts: 3,273member
    I have very serious issues with the dictatorship called the EU. It would be nice if the EU actually provided a product that competed with Apple but, alas, they don't have the ability to do so. Citizens of the EU have spoken, they like Apple products, they buy Apple products and want to continue to use Apple products the way Apple sells them. The only people who are actually complaining about Apple are developers who want to leech on Apple products getting everything for free. If the EU can't come up with products its own citizens want to buy then there's an issue with the EU, not with Apple. 
    daviOS_Guy80ssfe11tdknox9secondkox2elijahgwilliamlondonbluefire1davidlewis54bshank
  • Reply 3 of 96
    jimh2jimh2 Posts: 643member
    The first salvo should be giving away Apple Music for free or for a trivial amount to crush Spotify. The EU's problems is it cannot create any of its own products that people want and they are probably still holding a grudge against Apple for the implosion of Nokia.
    daviOS_Guy80ssfe11williamlondonAlex1Nwatto_cobra
  • Reply 4 of 96
    sphericspheric Posts: 2,626member
    rhbellmor said:
    Whenever the EU needs money for budget overruns 
    Which "budget overruns" would that be that you're referring to? 

    The theory that whenever the EU overruns some budget, they just go out and fine someone is kinda cute.

    It's like a five-year-old trying to understand government budgeting. 
    avon b7gatorguyiOS_Guy80blastdoorMisterKitRonnyDaddy9secondkox2muthuk_vanalingamVictorMortimerwilliamlondon
  • Reply 5 of 96
    sphericspheric Posts: 2,626member

    rob53 said:
    I have very serious issues with the dictatorship called the EU. 
    The fact that a democratically elected government is "dictating" rules that all businesses — even foreign ones — need to follow (we call them "laws") does not make them a "dictatorship". 

    You'd just rather not have to follow the law. 
    edited June 18 avon b7nubusRonnyDaddy9secondkox2muthuk_vanalingamVictorMortimerwilliamlondonAlex1NScot1
  • Reply 6 of 96
    gatorguygatorguy Posts: 24,390member
    spheric said:

    rob53 said:
    I have very serious issues with the dictatorship called the EU. 
    The fact that a democratically elected government is "dictating" rules that all businesses — even foreign ones — need to follow (we call them "laws") does not make them a "dictatorship". 

    You'd just rather not have to follow the law. 
    Apple doesn't just follow the letter of the law, they follow the spirit of the law. 
    edited June 18 9secondkox2muthuk_vanalingamAlex1Nappples
  • Reply 7 of 96
    blastdoorblastdoor Posts: 3,434member
    spheric said:
    rhbellmor said:
    Whenever the EU needs money for budget overruns 
    Which "budget overruns" would that be that you're referring to? 

    The theory that whenever the EU overruns some budget, they just go out and fine someone is kinda cute.

    It's like a five-year-old trying to understand government budgeting. 
    Agreed. This isn’t about paying the EU’s bills. And the EU is not a dictatorship, although it is bureaucratic and Byzantine. 

    I think the EU/EC has passed a stupid law and is enforcing it stupidly. That’s it — no need for childish hyperbole to make that point. 
    williamlondonAlex1NappplesScot1watto_cobra
  • Reply 8 of 96
    sphericspheric Posts: 2,626member
    gatorguy said:
    spheric said:

    rob53 said:
    I have very serious issues with the dictatorship called the EU. 
    The fact that a democratically elected government is "dictating" rules that all businesses — even foreign ones — need to follow (we call them "laws") does not make them a "dictatorship". 

    You'd just rather not have to follow the law. 
    Apple doesn't just follow the law, they follow the spirit of the law. 
    In this case, they're absolutely not following the spirit of the law. 

    They're complying with the letter, but adding extra levies to ensure that following the law makes effectively no difference. 

    That's the opposite of "following the spirit of the law", and it didn't fly with the EU commission. 
    9secondkox2williamlondonAlex1N
  • Reply 9 of 96

    "Well, we have a number of Apple issues [and] I find them very serious," [Margrethe Vestager] said on CNBC.

    Chief of which is that Apple isn't paying enough graft to keep the EU off its back.


    9secondkox2appplespaisleydiscowatto_cobra
  • Reply 10 of 96
    ssfe11ssfe11 Posts: 53member
    Apple gets barely 7% of its App Store revenue from the EU. The EU is like we have very serious issues with Apple like they are important lol. “We have very serious issues with Apple” “ really? Ahm sorry to tell you this but no one cares” 😃
    edited June 18 watto_cobra
  • Reply 11 of 96
    gatorguy said:
    spheric said:

    rob53 said:
    I have very serious issues with the dictatorship called the EU. 
    The fact that a democratically elected government is "dictating" rules that all businesses — even foreign ones — need to follow (we call them "laws") does not make them a "dictatorship". 

    You'd just rather not have to follow the law. 
    Apple doesn't just follow the letter of the law, they follow the spirit of the law. 
    The spirit of the law appears to largely consist of goalpost moving. 
    9secondkox2williamlondonAlex1Nmacxpresswatto_cobra
  • Reply 12 of 96
    blastdoorblastdoor Posts: 3,434member
    ssfe11 said:
    Apple gets barely 7% of its App Store revenue from the EU. The EU is like we have very serious issues with Apple like they are important lol. “We have very serious issues with Apple” “ really? Ahm sorry to tell you this but no one cares” 😃
    Apple can't afford to get into a mentality of giving up on products or markets just because they are "small". By that logic, they should stop trying with the Mac desktop lineup and lots of other 'small' things. A billion here, a billion there, and pretty soon you're talking real money. Successful companies fight hard for every product and every market. A prime example of a company that has done the opposite of that is IBM -- they are very fast to run away from a fight. 

    Furthermore, it's not just the EU trying to do this sort of thing. Lots of countries are going after 'big tech,' sometimes in ways that don't make a lot of sense. So Apple is at risk of this snowballing into something much larger than 7%. It's a very tricky balance for Apple. They need to pick their battles carefully and fight those battles effectively. The EU seems intent on giving them a battle that they must fight. 

     
    CrossPlatformFroggermuthuk_vanalingamwilliamlondonAlex1NScot1elijahgwatto_cobra
  • Reply 13 of 96

    spheric said: They're complying with the letter, but adding extra levies to ensure that following the law makes effectively no difference. 
    It will be interesting to see if the EU is really going to say there's something wrong with the Core Technology Fee in regards to the DMA banning anti-steering. I don't see how they make that argument when the CTF is based on number of installs and only applies to for-profit apps. What Apple appears to have done is apply the EU's own "size makes the difference" approach that the DMA itself uses. 
    williamlondonAlex1Nwatto_cobra
  • Reply 14 of 96
    sphericspheric Posts: 2,626member

    "Well, we have a number of Apple issues [and] I find them very serious," [Margrethe Vestager] said on CNBC.

    Chief of which is that Apple isn't paying enough graft to keep the EU off its back.
    I know the United States is devolving into some kind of corrupt banana republic where positions on courts and in government are handed out on a donation/friendship basis and Supreme Court Justices make millions in undisclosed "gifts" from "friends", but please don't assume that other places work the same way. 

    Thank you. 
    9secondkox2muthuk_vanalingamVictorMortimerroundaboutnowAlex1NScot1
  • Reply 15 of 96
    avon b7avon b7 Posts: 7,903member
    spheric said:
    gatorguy said:
    spheric said:

    rob53 said:
    I have very serious issues with the dictatorship called the EU. 
    The fact that a democratically elected government is "dictating" rules that all businesses — even foreign ones — need to follow (we call them "laws") does not make them a "dictatorship". 

    You'd just rather not have to follow the law. 
    Apple doesn't just follow the law, they follow the spirit of the law. 
    In this case, they're absolutely not following the spirit of the law. 

    They're complying with the letter, but adding extra levies to ensure that following the law makes effectively no difference. 

    That's the opposite of "following the spirit of the law", and it didn't fly with the EU commission. 
    I think he is with you on this and just drawing attention to the claims by Apple that they are the 'good guys done wrong'. Maybe the /s missing but Apple likes to fire off PR soundbytes of the type 'we follow the law', 'we follow the spirit of the law' or 'we have values' which in many cases just don't pass the sniff test.

    Anyway that's how I read his comment. 

    I also agree with you. Apple is dragging it's feet and making, minimum to no effort, to comply with a law that is actually easy to define in terms of spirit. 

    As Epic might say: malicious compliance. 

    Not exactly a model for values. More a case of having its cake and wanting to eat it. 

    I'm somewhat shocked that they even tried to run with the 'core technology fee' which, to my mind is a flagrant move at laughing right into the EU's collective face. Although the focus here seems to be still on the anti-steering side of things. 



    9secondkox2muthuk_vanalingamVictorMortimerspheric
  • Reply 16 of 96
    avon b7 said: I also agree with you. Apple is dragging its feet and making, minimum to no effort, to comply with a law that is actually easy to define in terms of spirit. 
    LOL...Apple made massive changes to iOS in a very short period of time as a result of the DMA going into effect. The reality of the Core Technology Fee is that Apple is doing what the EU itself did with the DMA: charge $$ for size...in this case, number of annual installs instead of number of monthly users. 

    The EU needs to decide if the "spirit of the law" means:

    A. Increase competition 

    OR

    B. Prevent Apple from monetizing it's IP
    edited June 18 purplepear9secondkox2williamlondonAlex1Nwatto_cobra
  • Reply 17 of 96
    avon b7avon b7 Posts: 7,903member
    avon b7 said: I also agree with you. Apple is dragging its feet and making, minimum to no effort, to comply with a law that is actually easy to define in terms of spirit. 
    LOL...Apple made massive changes to iOS in a very short period of time as a result of the DMA going into effect. The reality of the Core Technology Fee is that Apple is doing what the EU itself did with the DMA: charge $$ for size...in this case, number of annual installs instead of number of monthly users. 
    Laugh all you want but we'll see who has the last laugh. 

    Those 'massive' changes were made under pressure to correct (in essence) a situation that was harming EU consumers and should never have been there in the first place. It still is and that's why the possibility of a fine remains.


    9secondkox2muthuk_vanalingamVictorMortimersphericelijahg
  • Reply 18 of 96
    robin huberrobin huber Posts: 3,993member
    EU has serious issues alright, but they don’t have anything to do with Apple. What was supposed to make Europe the economic elephant the equal of the U.S. and China has “labored and brought forth a mouse.”
    purplepear9secondkox2Alex1NappplesiOS_Guy80watto_cobra
  • Reply 19 of 96
    avon b7 said: Those 'massive' changes were made under pressure to correct (in essence) a situation that was harming EU consumers and should never have been there in the first place. It still is and that's why the possibility of a fine remains.
    The EU has never shown harm to consumers. That's one of Apple's complaints in their appeal per the $1.8 billion fine for music streaming services anti-steering. Look at Spotify's growth curve for customers above. Apple Music launched in 2015. Whatever issues might have existed with communicating to customers (who have to provide contact information in order to sign up for the service) certainly didn't have much of an effect on their business.

    And remember, the "cheaper" option for Spotify is always going to be the ad-supported version which is free to download and free to use and doesn't involve Spotify paying Apple a dime. Plus, the premium version of Spotify was only more expensive for single year. Prior to that single year and after that single year Spotify never used IAP. 

    https://techxplore.com/news/2024-05-apple-appeals-huge-eu-fine.html#google_vignette
    edited June 18 purplepearwilliamlondonAlex1NappplesthtScot1watto_cobra
  • Reply 20 of 96
    nubusnubus Posts: 491member
    Vestager is ultra pro open markets. It seems not all here get that part. She is pushing for competition all the way by keeping competition fair. If you're like Apple doing tax evasion with a "Double Irish with Dutch Sandwich" model then you can expect to take some heat. And EU is by the way not keeping fines. Those fines are 1:1 deducted from what the countries pay and EU can't charge taxes on their own. EU is not like the US government.

    If Apple can't handle a person running things by the book, fighting for open markets, and being passionate about fair competition then the person replacing Vestager later this year will be a nightmare to Apple. The election earlier this month gave nationalistic parties more votes. Trade protectionism is high on their agenda. Tim Cook shouting at Vestager has all the way been very unprofessional. You don't see him like that when working with communist dictatorships.
    9secondkox2muthuk_vanalingamVictorMortimerwilliamlondonsphericelijahg
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