Apple Escapes Immediate EU Fines, But Penalties Still Likely

[Sophisticatednut]

The convoluted pretzel logic that is being used here. A better analogy is a popup stall in a mall that has to pay the mall owner commissions on sales and probably a base amount of rent for the space as well.

I would use a better analogy as a tollbooth to the road to the malls and shops across town to properly charge the smartphones a commission for the service.

Apple asserts that its platform 'enables' transactions, thus justifying commissions.
And I agree. But the ISPs are the ultimate enablers.

No data transmission, no commerce, Therefore:

• Any monetary exchange occurring on a device connected to our network constitutes a 'Network-Facilitated
  Transaction' (NFT).
• The ISP, as the foundational enabler, is owed a 30% Infrastructure Enablement Fee (IEF) on the gross value of said NFT
  This applies irrespective of:
• Payment processor (Apple Pay, Stripe, cash-in-a-browser),
• Platform intermediary (App Store, Safari, carrier pigeon app),
• Apple's own commission policies.

It’s fully consistent.
user pays $30 for internet and $30 for a Netflix subscription. Apple takes a 30% commission ($9) from Netflix, then ISP can demand the same industry standard 30% commission for the value transaction $9 from Apple. Then they extend it to Amazon physical goods (where Apple takes 0%) and browser-based purchases (where Apple takes 0% but ISP still demands 30%).


The Ironclad Case for ISP Commission Rights

The Sacred Conduit Principle

​

• Smartphones are inert bricks without OUR networks. Every byte of revenue-generating data be it a Netflix subscription, an Uber ride, or a crypto trade flows through OUR pipes. If Apple can tax apps for existing on their hardware, we tax transactions for existing on our infrastructure. Without our 5G/Wi-Fi lifeline, your 'digital business' is a tree falling in an offline forest. We didn’t lay fiber so you could freeload!"
  

The Ecosystem Equity

• Smartphones are inert bricks without OUR networks. Every byte of revenue-generating data be it a Netflix subscription, an Uber ride, or a crypto trade flows through OUR pipes. If Apple can tax apps for existing on their hardware, we tax transactions for existing on our infrastructure. Without our 5G/Wi-Fi lifeline, your 'digital business' is a tree falling in an offline forest. We didn’t lay fiber so you could freeload!"

The Double-Dip Defense

• You say users already pay us for data plans? So what! Apple users pay for iPhones AND get free access to the AppStore . Companies pay for servers? Irrelevant! Those servers connect through OUR networks. If you earn $1 via a smartphone, it’s only possible because:
  Step 1: Our network exists (you pay for access).
  Step 2: Our network transmits your transaction (you pay for usage).
  Step 3: Profit is generated (we deserve a cut for enabling value creation).

This isn’t double-dipping it’s triple-validated value capture!

The Innovation TaxPrecedent

• Apple charges fees to fund R&D. Marvelous! We’ll call our commission the Bandwidth Innovation Surcharge (BIS). Building 6G isn’t cheap! Without BIS, how can we invent latency-free hologram calls or implantable 10G chips? If developers must subsidize Apple’s laser sensors, why shouldn’t Shopify subsidize our quantum routers? It’s basic innovation economics.

The innovation Amplifier

• Think Apple’s 'link tax' is bold? We go further! If you so much as mention a website in a text message (e.g., ‘Check out my Etsy shop!’), our AI deep-packet inspectors will detect the revenue intent and apply a 15% ‘Referral Infrastructure Fee.’ After all, that link wouldn’t convert without OUR network. Fair’s fair!

This is Value Neutrality: if value touches their network, they re owed 30% of it. You wouldn’t expect a mall to let stores profit rent-free! We’re not just pipes; we’re profit-partners. The future is usage fees + revenue sharing. Embrace it… or get throttled into oblivion.

Apple says: 'We built iOS, so we deserve a cut of everything.' Well, ISPs built the internet's backbone! Why should Apple reap billions from our infrastructure investment? If ios is a 'toll road' for apps, then fiber cables are the 'interstate highway' for Apple's entire business. Trucks (data) using the highway (internet) pay tolls (ISP fees) - and Apple is the trucking company profiting from our roads!

Conclusion: By Apple’s own logic, ISPs are the true lords of the digital economy. If a hardware platform can tax software, the network transporting that software deserves tribute too. Let’s call it The Universal Carrier Commission Clause because if you’re not monetizing every value creation you enabled, you’re leaving money on the table.

 

[I7guy]

I would use a better analogy as a tollbooth to the road to the malls and shops across town to properly charge the smartphones a commission for the service.

Apple asserts that its platform 'enables' transactions, thus justifying commissions.
And I agree. But the ISPs are the ultimate enablers.

No data transmission, no commerce, Therefore:

• Any monetary exchange occurring on a device connected to our network constitutes a 'Network-Facilitated
  Transaction' (NFT).
• The ISP, as the foundational enabler, is owed a 30% Infrastructure Enablement Fee (IEF) on the gross value of said NFT
  This applies irrespective of:
• Payment processor (Apple Pay, Stripe, cash-in-a-browser),
• Platform intermediary (App Store, Safari, carrier pigeon app),
• Apple's own commission policies.

It’s fully consistent.
user pays $30 for internet and $30 for a Netflix subscription. Apple takes a 30% commission ($9) from Netflix, then ISP can demand the same industry standard 30% commission for the value transaction $9 from Apple. Then they extend it to Amazon physical goods (where Apple takes 0%) and browser-based purchases (where Apple takes 0% but ISP still demands 30%).

The Ironclad Case for ISP Commission Rights

1. The Sacred Conduit Principle
   
   • Smartphones are inert bricks without OUR networks. Every byte of revenue-generating data be it a Netflix subscription, an Uber ride, or a crypto trade flows through OUR pipes. If Apple can tax apps for existing on their hardware, we tax transactions for existing on our infrastructure. Without our 5G/Wi-Fi lifeline, your 'digital business' is a tree falling in an offline forest. We didn’t lay fiber so you could freeload!"
2. The Ecosystem Equity
   
   • Apple claims its 30% commission funds platform security, innovation, and user trust. Well, who maintains the towers, fights cyberattacks, and ensures your cat video loads at 3 AM? US. When you buy a $1,000 NFT via Ethereum on your iPhone, Apple takes 30% for hosting the App Store app… but WE enabled the transaction itself! Why should Zuckerberg pay Apple for Meta’s app but not pay US for transmitting his ad revenue? This is economic injustice."
3. The Double-Dip Defense
   
   • You say users already pay us for data plans? So what! Apple users pay for iPhones AND get free access to the AppStore . Companies pay for servers? Irrelevant! Those servers connect through OUR networks. If you earn $1 via a smartphone, it’s only possible because:
   • Step 1: Our network exists (you pay for access).
   • Step 2: Our network transmits your transaction (you pay for usage).
   • Step 3: Profit is generated (we deserve a cut for enabling value creation).
   • This isn’t double-dipping it’s triple-validated value capture!
4. The Innovation TaxPrecedent
   • Apple charges fees to fund R&D. Marvelous! We’ll call our commission the Bandwidth Innovation Surcharge (BIS). Building 6G isn’t cheap! Without BIS, how can we invent latency-free hologram calls or implantable 10G chips? If developers must subsidize Apple’s laser sensors, why shouldn’t Shopify subsidize our quantum routers? It’s basic innovation economics.
5. The innovation Amplifier
   • Think Apple’s 'link tax' is bold? We go further! If you so much as mention a website in a text message (e.g., ‘Check out my Etsy shop!’), our AI deep-packet inspectors will detect the revenue intent and apply a 15% ‘Referral Infrastructure Fee.’ After all, that link wouldn’t convert without OUR network. Fair’s fair!

This is Value Neutrality: if value touches their network, they re owed 30% of it. You wouldn’t expect a mall to let stores profit rent-free! We’re not just pipes; we’re profit-partners. The future is usage fees + revenue sharing. Embrace it… or get throttled into oblivion.

Apple says: 'We built iOS, so we deserve a cut of everything.' Well, ISPs built the internet's backbone! Why should Apple reap billions from our infrastructure investment? If ios is a 'toll road' for apps, then fiber cables are the 'interstate highway' for Apple's entire business. Trucks (data) using the highway (internet) pay tolls (ISP fees) - and Apple is the trucking company profiting from our roads!

Conclusion: By Apple’s own logic, ISPs are the *true* lords of the digital economy. If a hardware platform can tax software, the network transporting that software deserves tribute too. Let’s call it The Universal Carrier Commission Clause because if you’re not monetizing every value creation you enabled, you’re leaving money on the table.

Commissions have been around for decades. The best analogy is a popup store in the mall, or a third party vendor who wants to sell their wares at Costco. All pay some fees and commission for the right to use another’s space so they don’t have to rent, maintain, advertise, etc.

 

[Stuwil]

You’re using your son as a persona for the generation of kids where a smartphone is a necessity and I’m using my friends child as an example where it’s not. Either something is a societal necessity or not. If not just call it an individual requirement.

What I did say is I have the sophistication to understand societal necessities. And a smartphone while convenient falls far short of a necessity.

Because you are older meaning from a time before the smartphone in existed so you won’t fully understand because how could you as you are not from that era as you are from before that time.

Because I suspect your friends child is under 16 years of age and there is a difference because that is not the demographic of age I’m talking about
And his age group and above view the functionally of a smartphone differently from someone not from there era

 

[Sophisticatednut]

Commissions have been around for decades. The best analogy is a popup store in the mall, or a third party vendor who wants to sell their wares at Costco. All pay some fees and commission for the right to use another’s space so they don’t have to rent, maintain, advertise, etc.

No the correct one is a tollbooth. The mall the popup store etc is all reliant on the road and pipe infrastructure that enables their value creation and therefore justifies a commission to be charged as it’s neither a requirement and you can do your own infrastructure

 

[Sophisticatednut]

Wifi-direct appears to be available on iOS devices (based on the video transcript), which incidentally are the ones which fall under the DMA. Meanwhile, the Mac is conspicuously absent, and it is also exempt from the DMA. Perhaps there is no need to open up said protocol on the Mac because it's already available? I am not familiar enough in this area to comment, and well, it all just feels like too much of a coincidence.

I will have to wait and see what is available, and just how close this comes to an airdrop alternative (I assume users will not need to download a separate app). It does appear that while Apple seems to be actively resisting the DMA on one hand, they are also hedging their bets and working behind the scenes to open up parts of iOS in keeping with its demands.

I guess the proverbial oak tree (Apple here) has finally encountered a storm strong enough to knock it over. 😕

Well I did read the investigation and that’s where I found that Apple have had Wi-Fi aware for more than a decade. And it was Apple who recommended it.

In its response to the Preliminary Findings, Apple proposes to introduce Wi-Fi Aware […] to provide effective interoperability with the P2P Wi-Fi connection feature on iOS for third-party connected physical devices.​

And On page 52:

Since 2012, Apple worked with participants of the standardising body Wi-Fi Alliance to standardise a Neighbour Awareness Networking (“NAN”) protocol that establishes a P2P Wi-Fi connection. Whereas Apple initially proposed to standardise AWDL as the standard NAN protocol, an iterative back-and-forth process with other Wi-Fi Alliance participants has resulted in the latest version of a standardised NAN protocol, now called Wi-Fi Aware. The standardised Wi-Fi Aware protocol now diverges from the proprietary AWDL protocol to the extent that they are incompatible with one another.

Competition case search

Searches for published decisions can be carried out under policy area, case number, title and date.

competition-cases.ec.europa.eu

 

[Stuwil]

Commissions have been around for decades. The best analogy is a popup store in the mall, or a third party vendor who wants to sell their wares at Costco. All pay some fees and commission for the right to use another’s space so they don’t have to rent, maintain, advertise, etc.

Apple doesn’t operate a shopping mall or an individual store like Costco that’s how apple as a company try and get around all this stuff by deliberately not setting out what the iOS App Store is in terms of 3rd parties

 

[turbineseaplane]

I suspect that if the iPhone was as open as the Mac, it probably wouldn't have been anywhere near as successful as it is today. Just look at the state of android and the google play store today (higher incidence of piracy, malware and less developer support despite having greater market share). It's hard to take a look at that and go "Yeah, that's totally in the best interests of the consumer. Apple should totally copy that..."

“Jail wouldn’t be nearly as full if gates were unlocked”

Interesting what this implies about the jail.

 

[I7guy]

Apple doesn’t operate a shopping mall or an individual store like Costco

It sure does. It’s a digital marketplace instead of a physical marketplace.

that’s how apple as a company try and get around all this stuff

Try to get around what stuff? Some of the gross government overreach?

by deliberately not setting out what the iOS App Store is in terms of 3rd parties

It absolutely set out what the iOS app store is to third parties. And what people seem to forget Apple is not forcing any third party to engage in a business relationship.

 

[I7guy]

Because you are older meaning from a time before the smartphone in existed so you won’t fully understand because how could you as you are not from that era as you are from before that time.

Because I suspect your friends child is under 16 years of age and there is a difference because that is not the demographic of age I’m talking about
And his age group and above view the functionally of a smartphone differently from someone not from there era

Being sophisticated enough to understand the market one can plainly see pick your cell phone form factor. One size does not fit all which means there is no overreaching societal necessity as you claim.

No the correct one is a tollbooth. The mall the popup store etc is all reliant on the road and pipe infrastructure that enables their value creation and therefore justifies a commission to be charged as it’s neither a requirement and you can do your own infrastructure

A popup mall is the correct analogy exactly as you said above. Their use of the malls electricity and lights and hvac justified a percentage commission.

 

[Sophisticatednut]

Being sophisticated enough to understand the market one can plainly see pick your cell phone form factor. One size does not fit all which means there is no overreaching societal necessity as you claim.

A popup mall is the correct analogy exactly as you said above. Their use of the malls electricity and lights and hvac justified a percentage commission.

Well glad to know that you agree that’s ISPs deserves their commission so we can finally achieve the optimal commission ladder

 

[I7guy]

Well glad to know that you agree that’s ISPs deserves their commission so we can finally achieve the optimal commission ladder

Did the ISPs have a prior agreement with their customers to that effect. If not they missed the boat and are out of luck.

 

[Sophisticatednut]

Did the ISPs have a prior agreement with their customers to that effect. If not they missed the boat and are out of luck.

Before or after money changed hands?
And the agreement have a ” terms and conditions can change without notice ”

 

[I7guy]

Before or after money changed hands?
And the agreement have a ” terms and conditions can change without notice ”

Terms and conditions can change is standard. Was an agreement signed before money changed hands? An ill fitting analogy is like I’ll fitting clothing.

 

[Sophisticatednut]

Terms and conditions can change is standard. Was an agreement signed before money changed hands? An ill fitting analogy is like I’ll fitting clothing.

The contract was signed and the terms will be changed afterwards

 

[I7guy]

The contract was signed and the terms will be changed afterwards

That is standard in almost every business. I don’t see this being unique to any one company.however you are right. Apple did change the t&c in the App Store. Lower earning devs got a break so there is that.

 

[visualseed]

Most of these issues are done to the sheer geography of the USA. It should never have had one centralised communications company in the first place.

In the EEC we had the development of GSM for things to run cross-border but the management was down to individual nations. Things are a lot smoother and more efficient.

It wasn't. There were almost 1,500 independent phone companies in the US in 1984. While AT&T was the largest, in many regions it was not the most profitable. The AT&T model worked because it could use urban revenue to subsidize rural customers so everybody could afford phone service. Other regional operators focussed on higher-profitable niche markets like business customers or wealthier residential neighborhoods which could afford to pay a premium. In fact, it was AT&T's ability to actually service the lower end of the market and turn a profit on it that allowed the other operators to exist.

 

[WeLikeVodka]

accusing the EU of autocratic overreach for imposing regulations on a $3 trillion company is an interesting take, to say the least. or breaking up at&t leading to worse user experiences. I don't know what to say since the iphone you're reading this on wouldn't have been the same if at&t was still a monopoly.

Tech is boring, touch grass

 

[Ctrlos]

accusing the EU of autocratic overreach for imposing regulations on a $3 trillion company is an interesting take, to say the least. or breaking up at&t leading to worse user experiences. I don't know what to say since the iphone you're reading this on wouldn't have been the same if at&t was still a monopoly.

Tech is boring, touch grass

Indeed, the irony of protesting about a democratically accountable entity imposing laws on an unaccountable totalitarian tech giant seems lost.

 

[Melab]

It’s not pro consumer. It’s overreach.

Well, I, the consumer, likes it. So what now?

 

[Melab]

nobody is forced to buy their products and services.

Not an argument, but only a dodge.

 

[turbineseaplane]

Well, I, the consumer, likes it. So what now?

In Apple-Fan-Land it's not pro consumer to do things that might be better for consumers.

Here, Pro-Consumer means "whatever Apple decides is good".

 

[Melab]

In Apple-Fan-Land it's not pro consumer to do things that might be better for consumers.

Here, Pro-Consumer means "whatever Apple decides is good".

They're so damn dishonest. They should just argue that Apple has the right to lockdown the phones they make instead of blowing smoke up my ass over whether I "benefit" or not.

 

[turbineseaplane]

They're so damn dishonest. They should just argue that Apple has the right to lockdown the phones they make instead of blowing smoke up my ass over whether I "benefit" or not.

I'd have more respect for it, but I suspect they fare better legally and in public perception by gaslighting everyone about "security, safety and privacy" ...

After all ... who doesn't want to be told they are using the "safe, secure and private" method?

The entire company is driven by marketing hype now .. whether the claims are true or not.

It's maddening.

 

[Melab]

I'd have more respect for it, but I suspect they fare better legally and in public perception by gaslighting everyone about "security, safety and privacy" ...

After all ... who doesn't want to be told they are using the "safe, secure and private" method?

The entire company is driven by marketing hype now .. whether the claims are true or not.

It's maddening.

Oh, of course. It's just like when someone starts talking about statistics, pragmatism, and efficiency as an argument for/against something. That is not their real motivation. That sort of stuff doesn't drive anyone's decisions unless they're talking about the best steel for a bridge or something.

 

[surferfb]

I'd have more respect for it, but I suspect they fare better legally and in public perception by gaslighting everyone about "security, safety and privacy" ...

After all ... who doesn't want to be told they are using the "safe, secure and private" method?

The entire company is driven by marketing hype now .. whether the claims are true or not.

It's maddening.

Oh, of course. It's just like when someone starts talking about statistics, pragmatism, and efficiency as an argument for/against something. That is not their real motivation. That sort of stuff doesn't drive anyone's decisions unless they're talking about the best steel for a bridge or something.

As someone who thinks Apple gets it mostly right and the EU is massively overreaching, I think there is a big disconnect between people like us who post on MacRumors and the general public.

If everyone in the general public was technically proficient I’d have fewer qualms in requiring everyone to open up. But Apple has over a billion iOS users. Most don’t know what they’re doing.

Just today I had to explain to my MIL that no, she didn’t have a Windows virus on her MacBook, and please under no circumstances call the number on the pop-up in Chrome that was displaying the Windows blue screen and “your computer has been infected - call Microsoft to remove”. She seriously thought she had somehow gotten a virus and needed to call “Microsoft.” I seriously suspect she is significantly closer to the average user than us arguing about API access.

I also suspect most users won’t understand that by clicking things like “display notifications on my Meta sunglasses” means that Meta will potentially see the content Of all notifications and be able to sell ads against them.

TLDR: I honestly and truly think Apple has a significantly lower privacy and security threat tolerance than most people posting on MacRumors - and I’d argue theirs is much more realistic than the EU’s.

I know reasonable people can disagree on that, but it’s how I feel.