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

[surferfb]

Without those app developers there would be no iPhone. Apple should remember that.

There was literally an iPhone without third-party apps.

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.

I have no doubt Apple undervalues the impact of developers on their success, but I also think many developers significantly undervalue the impact of Apple on their success. As you put it, it's a symbiotic relationship, but if you listen to many developers, Apple should just provide and maintain iOS, APIs and the App Store out of the goodness of their hearts and not charge anything. The fact that Apple has built a customer base who has disposable income to pay for software and services, and provides an easy and safe way for customers to pay for those services is just ignored entirely.

 

[0049190]

Meta offers a way to not be tracked on the EU that priced in such a way that Meta doesn’t break even by a long shot. But that’s not good enough for the EU. The EU is demanding something that’s impossible. “The same service for free with unpersonalized ads” is literally impossible. Advertisers don’t want unpersonalized ads! Which means the EU is practically forcing Meta to give its service away for free.

And again, I am not a fan of Meta. But that’s ridiculous.


I already did. If you can’t see how that’s corrupt then that’s on you.


I agree Apple should comply with the law, even if it’s a bad and stupid law, which the DMA most certainly is. But Apple would argue they are complying and the EU is not recognizing that compliance, or asking for things that go beyond what the law says. They should have the right to appeal that decision, and it sounds like they are.

It’s not impossible, just less profitable. Meta could always switch to a subscription model if they wanted to.

 

[turbineseaplane]

There was literally an iPhone without third-party apps.

C'mon -- the VERY FIRST ONE ... only
That's just disingenuous to bring that up and even hint it's a relevant point here.

What should be noted, actually, is how iPhone SKYROCKETED once 3rd party apps were "a thing".

 

[0049190]

There was literally an iPhone without third-party apps.


I have no doubt Apple undervalues the impact of developers on their success, but I also think many developers significantly undervalue the impact of Apple on their success. As you put it, it's a symbiotic relationship, but if you listen to many developers, Apple should just provide and maintain iOS, APIs and the App Store out of the goodness of their hearts and not charge anything.

I don’t know any app developers asking for a free ride. They are saying Apple’s 30% commission is too high and I agree with them.

 

[hagar]

EU politicians of course. And the fines will be paid by increasing the prices of Apple products in the EU.

Nonsense. The fines don’t benefit EU politicians. They are paid directly into the EU’s general budget. This reduces the contributions required from member states, effectively benefiting taxpayers.

 

[turbineseaplane]

I don’t know any app developers asking for a free ride. They are saying Apple’s 30% commission is too high and I agree with them.

The really sad part is the ones who do get a free ride (or anything close) are the megacorps who have the power and ability to "get it out of Apple".

It's all a big power game ... which is specifically what the EU is trying to address.

 

[Scepticalscribe]

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.

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

Good news.

Actually, excellent news.

And not before time.

 

[raythompsontn]

The EU are not the only ones to fine Apple. I think they are also being looked into by the US government.

I am not surprised. An easy target for lots of money. Politicians don't realize that fines are paid by customers and users, not by the company. Fining a company is not really hurting the people that make the corporate decisions. Which is where the financial punishment should reside.

 

[turbineseaplane]

Honestly, so much of this comes down to the realization that some people really love corporate power.

I suspect it's because it's a constant tension of said corporate power putting food on your own table vs all the insidious ways corporate power erodes your experience, rights, value, etc, as an individual.

It's a complicated mess to untangle how and why folks feel how they feel.

 

[Jeo_cz]

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%).

They paid US taxes on that money in 2018. It was widely reported.

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

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.

None of these has anything to do with the original topic. Sorry guys, read about it again and let the court decide what' s right or not. We (in Europe) trust our courts, not like MAGA people in the US who only trust those who have the same opinion.

Apple loses EU court battle over €13bn tax bill in Ireland

Ruling is a fillip for European Commission efforts to clamp down on ‘sweetheart’ tax deals

www.theguardian.com

 

[BaldiMac]

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.

"Increasingly abused"? In what way? The App Store policies have become less restrictive and iOS has provided more value to developers over time.

 

[turbineseaplane]

I am not surprised. An easy target for lots of money. Politicians don't realize that fines are paid by customers and users, not by the company. Fining a company is not really hurting the people that make the corporate decisions. Which is where the financial punishment should reside.

How do you propose to financially punish a company if you're saying don't do that?

Other suggestions?

 

[surferfb]

I don’t know any app developers asking for a free ride. They are saying Apple’s 30% commission is too high and I agree with them.

It's 15% for most developers. And that is incredibly reasonable. If you're old enough to remember in-store sales, you'll realize it's actually a steal (which is why developers cheered when Steve announced commission would be 30%)

And again, if they don't think 15-30% is worth it, then they don't have to sell to iOS users in the App Store - Android exists, Web Apps exist, free with subscriptions only available online exist. But they DO want to sell to iOS users in the App Store, because it is absolutely worth it - they just don't want to pay for it not realizing their businesses wouldn't exist without Apple's IP and App Store.

 

[turbineseaplane]

The App Store policies have become less restrictive and iOS has provided more value to developers over time.

Because there's been more and more uproar and attention on their abuse of power. I don't just mean by governments, but in the developer communities. This has been a topic of growing irritation for years and years, surely you know that.

You can't possibly think Apple has made rules less restrictive by choice.

Please tell you me you don't believe that.

 

[turbineseaplane]

if they don't think 15-30% is worth it, then they don't have to sell to iOS users in the App Store - Android exists, Web Apps exist, free with subscriptions only available online exist. But they DO want to sell to iOS users in the App Store, because it is absolutely worth it - they just don't want to pay for it not realizing their businesses wouldn't exist without Apple's IP and App Store.

We've been over this so many times.

For most developers and businesses, it's really not viable to "not" address iOS users.

Holding up "just don't sell to X users" or "use webapps" is a non starter.

C'mon - you're way smarter than this.

 

[surferfb]

We've been over this so many times.

For most developers and businesses, it's really not viable to "not" address iOS users.

Holding up "just don't sell to X users" or "use webapps" is a non starter.

C'mon - you're way smarter than this.

Well then if not addressing Apple's customers means you're not viable, then it sounds like 15% is a great deal and worth paying for!

Would I personally be happy if Apple reduced commissions? Absolutely! But in my opinion that's Apple's decision to make, not the government's.

 

[turbineseaplane]

Would I personally be happy if Apple reduced commissions? Absolutely! But in my opinion that's Apple's decision to make, not the government's.

And they are operating in the EU

So they'll have to comply or leave I guess?

 

[0049190]

The “greedy” conspiracy with Lightning doesn’t make any financial sense. If USB-C was so important to customers, they would have changed before, because cable sales and lightning royalties are peanuts compared to iPhone sales. The move to USB-C probably resulted in more annoyed than happy customers.

I have no idea what you’re talking about. The move to standardise connections on USB-C was to reduce e-waste which is causing tremendous harm to the environment. On a practical level I prefer only needing to carry one charger instead of two or more.

 

[BaldiMac]

None of these has anything to do with the original topic. Sorry guys, read about it again and let the court decide what' s right or not. We (in Europe) trust our courts, not like MAGA people in the US who only trust those who have the same opinion.

Apple loses EU court battle over €13bn tax bill in Ireland

Ruling is a fillip for European Commission efforts to clamp down on ‘sweetheart’ tax deals

www.theguardian.com

Where does the ruling disagree with anything I said?

Apple lost because they temporarily restructured their Irish subsidiaries into two branches of the same company instead of two separate companies with the approval of the Irish tax authority. When the EU complained, they changed it back to two separate companies. Which doesn't change any of the points that I made.

 

[turbineseaplane]

Apple lost because they temporarily restructured their Irish subsidiaries into two branches of the same company instead of two separate companies with the approval of the Irish tax authority.

Ugh. Just reading this.

We need to get a wrangle on these international conglomerates shopping around for preferential tax status.

It's all so toxic.

 

[surferfb]

And they are operating in the EU

So they'll have to comply or leave I guess?

Yes absolutely. Apple needs to follow the laws in the jurisdictions in which it operates. Even if those laws are stupid and counterproductive and against free market principles. But Apple absolutely should fight the laws it sees as unjust.

 

[0049190]

Dear Tim, talk to Donald Trump about this. Reciprocal laws that regulate European companies in the US are only fair. Why are only American companies regulated in other countries?

For example, the US should form a council and grade every luxury product on quality. Every luxury brand from Europe must get a quality certificate, and the US should maintain a website where all the products of the same grade are listed, sortable by price.

That means: If Hermès wants to sell leather in the US, it should get a grade. Let’s say Hermès has A++ leather. Then any company can get their leather graded and added to the US website. Customers can search for A++ leather and sort it by price. Now this is the kind of regulation that will benefit customers for sure.

EU law applies to everyone not just American companies. It applies to European companies, Chinese companies, etc, etc.

 

[cyb3rdud3]

You're asking me to quote language that isn't in the bill. The DMA outlines what "core platform services" can be considered Gatekeepers. Music Streaming is not listed. The DMA only applies to these sorts of products/services:

• Online intermediation services
• Online search engines
• Online social networking services
• Video-sharing platform services
• Number-independent interpersonal communications services
• Operating systems
• Web browsers
• Virtual assistants
• Cloud computing services
• Online advertising services (including advertising networks, advertising exchanges and other advertising intermediation services) provided by an undertaking that offers any of the core platform services listed above

Music streaming isn't on that list. Neither is Enterprise Resource Planning applications (SAP). So the two largest European tech companies' products are specifically excluded from having the law apply to them.

Right, you still don't seem to be able to quote from the act (it is not a bill) as to where and how the two largest European tech companies are specifically excluded. I mean, you are the one to choose words like literally (in a previous post), and specifically (now) and excluded. There is nothing in this legal act that states such things. That entirely a made up construct.

Some of the points you list above are in paragraph 14 but mentioned preceeding with "In particular, ..." and marked as non-exhaustively. It even continues in (15) that '...a digital service qualifies as a core platform service does not in itself give rise to sufficiently serious concerns ...". You seem to be hanging your hat on USA vs European tech companies whilst there is absolutely nothing in this legal act that makes such a distinction nor has it as a threshold.

I would seriously suggest to actually read the act as none of what you are suggesting is described in it.

 

[surferfb]

Right, you still don't seem to be able to quote from the act (it is not a bill) as to where and how the two largest European tech companies are specifically excluded. I mean, you are the one to choose words like literally (in a previous post), and specifically (now) and excluded. There is nothing in this legal act that states such things. That entirely a made up construct.

Some of the points you list above are in paragraph 14 but mentioned preceeding with "In particular, ..." and marked as non-exhaustively. It even continues in (15) that '...a digital service qualifies as a core platform service does not in itself give rise to sufficiently serious concerns ...". You seem to be hanging your had on USA vs European tech companies whilst there is absolutely nothing in this legal act that makes such a distinction nor has it as a threshold.

I would seriously suggest to actually read the act as none of what you are suggesting is described in it.

I've read the DMA multiple times, and parts of it in two languages just to make sure I wasn't missing something in how it was being read. I'm well aware of what is and isn't in it.

If you can't get your head around the concept that it could have been written to exclude European companies without coming out and saying "does not apply to companies based in the EU" I don't know what to tell you.

 

[subjonas]

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.

I don’t see anything wrong with the “consent or pay“ business model itself, but there absolutely needs to be transparency of what each choice means and a clear moment of making that choice. I take “failed to provide users with a genuine choice regarding their personal data” to mean that Meta didn’t make the choices clear. But how so? I wish the article would explain this as I’m not familiar with Meta’s business.