EU has very serious issues with Apple, says competition chief
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.
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
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.
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.
That's the opposite of "following the spirit of the law", and it didn't fly with the EU commission.
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.
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.
Thank you.
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.
The EU needs to decide if the "spirit of the law" means:
A. Increase competition
OR
B. Prevent Apple from monetizing it's IP
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.
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
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.