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Apple Hit With €500M Fine as EU Enforces Digital Markets Act

davide_eu said:
Do you get the difference between an application store and a single ERP?
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I do - I should have said ERP Platforms, not applications. But I'd argue ERP platforms like SAP create far more lock-in for business users than the App Store does.

And again, if iPadOS gets declared a gatekeeper despite not meeting the metrics written into the law because "significant numbers of business users" use iPadOS to reach their customers, how can the EU argue with a straight face that ERP platforms shouldn't be considered gatekeepers? Do you disagree that significant number of business users get locked into SAP? Does that lock-in not harm competition?
 
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MacRumors said:


The European Commission has fined Apple 500 million euros ($570 million) and Meta 200 million euros ($230 million) for violating the Digital Markets Act (DMA), in the first penalties ever issued under the new EU tech regulation.

european-commission.jpg

Apple was penalized for restricting app developers from informing users about alternative payment options outside the App Store. The Commission said it had determined that Apple's policies prevented developers from taking full advantage of distribution channels beyond Apple's ecosystem, limiting consumer access to potentially cheaper offerings.

"App developers distributing their apps via Apple's App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases," the European Commission stated.

The Commission said it had ordered Apple to "remove the technical and commercial restrictions on steering" and to refrain from perpetuating the non-compliant conduct in the future.

Today, the Commission also closed the investigation on Apple's user choice obligations, thanks to "early and proactive engagement by Apple" on a compliance solution. Apple now gives users more options to delete apps that come preinstalled on iPhones.

Meta's fine stems from its "consent or pay" model implemented in November 2023, which forced European users to either consent to personal data combination for targeted advertising or pay a monthly subscription for an ad-free experience on Facebook and Instagram.

The Commission ruled that Meta's approach failed to provide users with a genuine choice regarding their personal data, as required by the DMA. Meta has since introduced a modified version of its advertising model in November 2024, which the Commission is currently evaluating.

Both companies have been ordered to comply with the Commission's decisions within 60 days or face additional periodic penalty payments.

Apple said it plans to appeal the decision. The company called it "another example of the commission unfairly targeting the company" with actions that are "bad for the privacy and security of our users."

Meta also indicated it would likely appeal. Joel Kaplan, Meta's chief global affairs officer, said that "the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service."

The penalties represent approximately 0.1% of each company's annual revenue, which is significantly below the potential maximum fine of 10% allowed under the DMA.

The rulings come amid ongoing trade negotiations between the EU and the US, which could potentially add another layer of complexity to the transatlantic tech regulations.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Hit With €500M Fine as EU Enforces Digital Markets Act
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Another 5 lawyers getting $100 Million each
 
Jeo_cz said:
Since when Apple pays taxes in the US from EU operations when they purposely chose Ireland (with 0.05 % taxes) as its European centre and moved all European financial operations there to avoid all other EU taxes (each state has a different tax)?
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They paid US taxes on that money in 2018. It was widely reported.

www.irishtimes.com

Apple to incur $38bn US tax bill as it repatriates Irish cash pile

Sum suggests technology giant plans to transfer $252 billion held outside US
www.irishtimes.com www.irishtimes.com

The entire Irish arrangement was about delaying the payment of US taxes, not avoiding taxes altogether. Vestager never could quite get her head around that.
 
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Jeo_cz said:
Since when Apple pays taxes in the US from EU operations when they purposely chose Ireland (with 0.05 % taxes) as its European centre and moved all European financial operations there to avoid all other EU taxes (each state has a different tax)?
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1. The EU lied about the .05% tax rate to influence public opinion. They divided taxes by revenue instead of profit. Apple pays the standard Irish corporate tax rate (12.5%?) in Ireland.
2. You don't pay taxes on revenue, you pay taxes on profits. Apple booked very little profit in Ireland. The vast majority of European revenue is booked in the US towards US profits that are taxed at the US corporate tax rate (21%).
3. The whole tax controversy was about Apple using Irish tax laws to DELAY paying US taxes when the US corporate tax rate was much higher (35%).
 
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MLVC said:
What do you mean? There aren't broad EU tariffs on American tech products, and most tech doesn't actually come from the US manufacturing-wise, so even if there were tariffs, the impact would be limited. The US tariffs raise prices for Americans, not Europeans.
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It’s much more complicated though. In some cases they actually raised the prices on Europeans. For example, Sony raised their PS5 prices in Europe, but not the US. Why? Because it’s more important for them to not lose the US customer base, since Xbox is significantly more relevant in the US. They felt that they were less likely to lose European customers since Xbox isn’t as relevant there.

In the end, customers are going to be mainly footing the bill for tariffs, fines, etc. But when it comes to global corporations, the pain is typically going to be spread around in a way to prevent having drastic price increases, and not necessarily in the most fair ways.

Similarly the Switch 2 didn’t increase in price for the US. Nobody but Nintendo knows, but there is a good chance that the original price was set already higher than it would have been, already accounting for tariffs. It’s possible that the entire world is paying more for the Switch than they would have without all the tariffs because Nintendo wanted to be able to release it in America at the “MSRP.”
 
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surferfb said:
So others get to freeload. Not fair at all.
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Spotify & co. don’t want to “freeload” on Apple’s in-app purchasing system.
They want to handle their transactions themselves.

And note that nothing requires Apple to give away their App Store (resources) for free.
They’re free to charge - so no freeloading there either.

But when you give away tools and services for free to obtain monopoly power (as they did with their app store), government may limit your ability to leverage that in anticompetitive ways.

surferfb said:
Spotify isn’t required to pay Apple anything, and is competing just fine
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…but not on a level playing field when it comes to in-app communications.
They’re only able to compete because it’s perceived as a superior service compared to the competition.

SanderEvers said:
But, Apple was moving from lightning to USB-C for YEARS before the EU came with that legislation.
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Introducing major new products with Lightning through 2022 (!) wasn’t “moving away for years”.
 
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AppliedMicro said:
Spotify & co. don’t want to “freeload” on Apple’s in-app purchasing system.
They want to handle their transactions themselves.
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They want to use Apple's store for free without paying for any of the benefits they get from being in the store, because they're run by a bunch of freeloaders who are so used to stealing from musicians they think they should be able to steal from anyone.

AppliedMicro said:
And note that nothing requires Apple to give away their App Store (resources) for free.
They’re free to charge - so no freeloading there either.
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Apple currently provides a way for Spotify to be in the App Store and not pay Apple anything. But that's not good enough for Spotify. They think they deserve to be in a store, get all the benefits of that store, and not pay a dime, because, again, they're a bunch of freeloaders.

AppliedMicro said:
But when you give away tools and services for free to obtain monopoly power (as they did with their app store), government may limit your ability to leverage that in anticompetitive ways.
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Apple does not have a monopoly no matter how many times you say it does.

AppliedMicro said:
…but not on a level playing field when it comes to in-app communications.
They’re only able to compete because it’s perceived as a superior service compared to the competition.
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Again, giving Spotify free access to Apple's store without having to pay Apple for it reduces competition
 
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Aeronauts said:
The money went back to the Irish taxpayers who would have received it in the first place if their government hadn’t agreed a tax avoidance scheme with Apple.
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The EU took profits Apple booked in America, and gave it to Irish taxpayers against the desires of Ireland's government (that the people of Ireland voted for) and EU law that member countries get to design their own tax policy.
 
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Dr McKay said:
We now go live to the MacRumors userbase for their spin on why Apple should pull out of the entire continent of Europe rather than make some simple changes.

Would love to see the people who say that be the ones who have to explain to the shareholders why Apple pulled out of a market of 745M people.
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When the government makes it too expensive or too difficult to operate in a given territory, it makes absolute sense to pull out. The government's argument is that Apple is harming consumers. If and when apple were to pull out of the EU, we would see that consumers are actually being harmed by government over regulation.
 
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raythompsontn said:
The EU has found a way to add to their coffers. Apple, or any company, does not pay the fines. The customers do through increased prices. Sure people don’t have to buy the product, but they will. Then bitch at Apple for the price being too high. It is past time for one of these companies targeted by the EU to tell the EU to put it where the sun doesn’t shine. Most of the laws are passed by politicians with VCRs still flashing 12:00 as their understanding of technology stopped with a rotary dial phone.
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The EU are not the only ones to fine Apple. I think they are also being looked into by the US government.
 
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surferfb said:
Would it be better for consumers and developers if Apple didn't allow free apps on the App Store? Of course not.
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Whether there are free apps or not is a different issue than Apple providing free tooling to juice dev interest and build up their market position... a position they've, over time, increasingly abused.

I was replying directly to someone making that general point.
 
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Aeronauts said:
Without those app developers there would be no iPhone. Apple should remember that.
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This is the problem I have with too much siding with Apple.

It greatly overvalues their contributions while, at every turn, diminishing the contributions of developers and how that has fed and solidified the business and power position of Apple.

It's a symbiotic relationship where Apple wants outsized benefits and flexes their power to get them.
 
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