Thank you for another douchey, bigoted answer. If we people outside the EU are incapable of understanding your political wisdom, why are you wasting your time telling us about it?
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Apple Intelligence Features Not Coming to European Union at Launch Due to DMA
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You are correct. "Only" is an overstatement. But it arguably does violate property rights since it requires Apple to give access to their intellectual property to others against Apple's will. Under this type of regime, Apple will be forced to withhold technologies from the EU so as not to compromise their ownership rights.
Capitalism cannot survive without regulation. The question isn't whether regulation per se is good or bad, it is whether the DMA is good and just.
Apple does not limit your choice. If you're not satisfied with the value proposition offered by Apple's ecosystem, you have a wide range of alternatives to choose from, including Samsung, Google, Honor, Fairphone, Oppo, Xiaomi, Alcatel, Motorola, Nokia, and more. Many of these options are priced at just a fraction of what Apple charges. As a result, you aren't limited by either price or functionality.
This is a subjective judgment made by each individual at the time of purchase. Since no one is ever forced to buy Apple products, and given the ample competition across a wide range of prices, it raises an interesting question: why do 25% of Europeans still choose to buy an iPhone?
Given that Apple holds a minority market share and faces numerous competitors, it will be challenging for you to demonstrate that they are stifling innovation. Of course, merely declaring it as such (as the DMA has done without sufficient evidence) may lead people to believe it, but at this point, the claim remains unproven. Let's wait and observe the actual innovation in apps now that we might see an unrestricted approach in the EU. Will there be any innovation that offsets the coming privacy violations? That will be an interesting thing to watch.
[By the way, true innovation should not be confused with simply being able to purchase a similar, albeit mediocre, product at a slightly lower price before a company ultimately fails due to unsustainable pricing in a highly competitive and saturated market.]
You make that claim, but can you substantiate it? The system isn't necessarily broken just because there's little competition. In reality, the lack of competition might stem from the fact that no one perceives an opportunity worth the risk of investing capital to compete effectively. For instance, with most apps, there is no shortage of choices available, many of which are free or nearly so. You cannot blame Apple for your inability to command a higher price for your innovative take on a music streaming app when the market is already saturated by a dozen free offerings, and no one finds any differential value in yours that would justify the price you wish to charge.
As previously established, there are around a dozen competitors to Apple's ecosystem. Over the years, I've used phones from Motorola, Treo, HTC, Google, and Apple. I'm not hesitant about switching when I find better value elsewhere. You can call my current preference for Apple "submission," but that characterization is so inaccurate it falls flat as rhetoric.
As an aside, you should note that without rent, there would be no profit. So, your use of the phrase "rent-seeking" as a way to denigrate Apple may resonate with some, but people who understand economics will realize that you are misapplying or misunderstanding this concept.
Likewise, characterizing Apple as a nanny corporation falls flat.
Really? You can decide for yourself between Apple and a handful of others. No one forces you to buy Apple. If you want the opportunity to ski on your vacation, go to Switzerland. Don't go to the Loire Valley and accuse France of denying you choice.
Buy Android. Use Google Play or an alternative App Store, perhaps one provided by the phone manufacturer or another.
This presents a sticky wicket in itself since most retro-gaming emulators are primarily used to violate copyright laws by illegally copying programs. There are real legal questions involved. If Apple were to distribute such programs through their App Store, they could be sued for abetting the illegal activity. In the wake of Napster, every company needs to be careful about how their technology can be used to foster property-right violations.
You really lose the argument here. First, consumers generally don't get to decide what technology is used in their devices. I don't get to decide whether my iPhone uses an Apple A-series processor or a Qualcomm. I don't get to decide whether it has a front camera, or a back camera, or both or neither. I don't get to decide whether Apple is using a proprietary implementation of sockets or an open-source implementation. What I do get to decide is whether I like the value that Apple's product provides based on its function.
Second, the green text provides me with a value that I want. It indicates that the link is not end-to-end encrypted. It lets me know that whatever I send could be snooped. This is a substantial value proposition to me as I use Messages to communicate confidential information to other iPhone users. If I know the person on the other end is using an Android, I will instead email them an encrypted file for any sensitive or proprietary communication.
BTW, Apple has avoided implementing RCS in the past because it's a mess. No one (in the US at least) has implemented the direct GSMA standard. Instead, they have implemented Google's modification of the standard. Apple is working with the GSMA to come up with a universal standard that everyone can use. That said, they are implementing the standard due to a Chinese law mandating it for messaging. However, they still won't have end-to-end encryption since that is a Google extension and not part of the standard. So, the green text will stay for the time being and it will be providing significant value to Apple's customers. Ignorant people will accuse Apple of not fully complying, when what Apple is actually doing is not letting Google dictate its implementations instead of the GSMA standard. The politics of industry standards is tricky. Whether Google is successful at getting the GSMA to adopt its extensions is a political game that will play out.
The law is overreaching and singles out particular companies for penalty. It provides little if any additional choice to the consumer. It has nothing to do with fair. It has more to do with the EU penalizing non-EU companies for beating EU companies in a fiercely competitive market.
This is one of the few (maybe even only) statements you've made that I agree with. Capitalism requires regulation if it is to yield economic efficiency. Without regulation, its equilibrium points are wasteful and counterproductive to a well-functioning society.
However, given the number of competitors Apple has and its minority position in the EU market, you haven't established that this is the case. The EC hasn't even stated this. It had to define a new market category for business, specifically the "gatekeeper" concept, and then segment the market into sub-markets determined by multiple gatekeepers, and only then apply monopoly reasoning. Since no harm has been proven, it's not clear that the law solves any problem, let alone the unproven problem it purports to solve. Worse, it violates the intellectual property rights of foreign companies and reduces the differential value of Apple's ecosystem. Frankly, the law has more to do with protectionism against foreign companies than it has to do with consumer protection, since arguably, it reduces consumer choice for privacy and security.
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You might have a diffenet understanding of the term rent-seeking (or econmic rent). Generally it describes profit, that is not the result of productive activities, but related to some kind of privilege like a patent, or a monopolistic position in a market. It's excess profit that would not be realized under conditions of abundance and strong competition.
Apple can develop and release technologies as they want - and they can charge for them what they want.
They can release their "Intelligence" or screen sharing features at any (including subscription) pricing they desire.
They can release it as an "Intelligence" App that competes with other AI apps.
They can release it as an operating system feature that other apps may access.
They're just required to provide interoperability for underlying (operating system) platform features.
They can't say: "Only our own intelligence app can integrate through other apps through the system" or "Only our own music streaming service can access our OS intelligence feature - eat this, Spotify!". Or make it "pay for play" to Spotify.
👉 Given Apple's enormous platform power, this strikes a fair balance between Apple's ownership rights and the interests of others.
No, my choice is very limited.
First, Apple do limit my choice of source of apps.
Second, the regulation is not concerned with hardware devices. Samsung and all of the other do not offer competing ecosystems - they're all part of the broader Google Android/Play Store ecosystem.
When it comes to software platforms (what the DMA is concerned with) my choice is limited:
- Apple iOS and the Apple App Store OR
- Android and the Google Play store
That's it.
It's a duopoly.
It's like saying that Microsoft is just a minority market participant, cause there's so many HP, Dell, Lenovo, Acer, Asus computers to choose from.
Again, the DMA isn't concerned with the market for hardware purchases. There is, as you say, ample competition in that.
But you're certainly aware that all of the other non-Apple options share the same operating system, for which there's only one relevant and dominating application software store.
There isn't. They're perfectly legal, while distribution of copyrighted software isn't. Apple has begun carrying them in their own App Store - and they even made the exception that allows such emulators apply only to their own App Store. They clearly have little issue with carrying such apps, if 1) it's in their store 2) allowed to be sold by competitors in European App Stores and 3) the U.S. sued them for disallowing "super apps".
See above. It's Apple iOS and the Apple App Store or Android and the Google Play store.
There's way more than two competing holiday regions.
And the Loire Valley (to my knowledge) get's very little snow naturally.
Whereas Apple's monopoly on application software sales for iOS or digital in-app purchases is all but a natural one. So that's where the appropriateness of the comparison ends.
For the umpteenth time: Apple is not a minority player. They're estimated to command more than half of every Euro spent on mobile apps today.
It's like saying that Microsoft is just a minority market participant, cause there's so many HP, Dell, Lenovo, Acer, Asus computers to choose from.
Again, the regulation is not concerned with hardware devices or what's built into them.
So?
The colour is useful and may be a value proposition - that doesn't change anything about the fact that Apple uses their messenger for consumer lock-in. And that the unavailability of iMessage - or a compatible messenger - isn't about but against consumer choice.
The question about messenger services isn't much relevant with regards to Apple and in the EU anyway. In Europe, it's much more relevant with regards to Meta's WhatsApp.
Antitrust law does not require a monopoly or majority of the market. Together with Google/Android - which has very similar pricing and rules - Apple certainly are in the majority.
Consumers can choose to download all of their apps from Apple.
It's not a consumer protection law, it wasn't designed as one. It's not protectionism either - there is no relevant European competitor to Apple and Google on mobile OS or application software stores. It's just about fair competition on markets that are dominated by a few underlying platform operators.
The harm is obvious. Take music streaming services, for instance:
Music streaming services are expected to be multi-platform services by consumers. And they are expected to provide native-app experience on mobile devices. While not legally forced to develop iOS and Android apps, they do not practical choice from a commercial perspective not to. Apple put(s) them in a dilemma of either having to pay 30% of their revenue as commission to them - or refrain from making any sales-related marketing at their main interaction point with the customer (their apps). All the while Apple themselves have entered the market with a competing service of their own.
That doesn't make for fair competition in music streaming services.
Competing services either have higher costs and earn less - or consumers get sub-par user experience.
That's the harm (and no, it doesn't need to be quantified to the millions, as it may have to be in court).
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And yet they decided to allow emulators even in the US, right before the DMA went into effect. Is it a coincidence? I don't think so. They likely realized, that this is the one thing that US customers would have been jealous of, if only EU iPhones would allow this category of apps. Very clever PR move by Apple.
I would not be suprised, if Apple very soon will also allow competing browser engines worldwide for the same reason.
Privacy and open APIs are not a contradiction, as Apple would like us to believe. First, every user has a choice about which app publishers they trust. Second, it's up to Apple to make their API secure and make apps ask for user consent when private data is involved. Apple has a good track record in this regard, and this is one reason why I prefer their platform over Android. But I still prefer to have a choice instead of Apple deciding this for me. The same goes for Google, by the way. The DMA explicitly allows such safeguards, the only thing that is not allowed is to treat first-party apps preferentially.
Unfortunately, switching ecosystems is not as easy as listing a couple of brands. You lose access to purchases (apps, music, videos) collected over the years. Your new device might not work as well with the other devices you use in your home anymore (think speakers, home automation, and cameras). You might have to change your e-mail address. Smartphone operating systems are incredibly sticky by design. It's much easier to switch to another car brand than to switch phone ecosystems, in my opinion.
Also, the way app distribution works on a platform is just one of many factors playing into the buying decision. There are many other factors that have to be weighed. Is it so hard to accept that you can prefer an iPhone over a Pixel and still be unhappy with how restricted iOS is?
Well, Apple isn't the only company capable of providing artificial intelligence features. They're arguably behind with their own technology by a few years. It will certainly be interesting to see what products/services others come up with.Though there's of course still the issue that Apple want's to get paid for in-app purchases and their anti-steering provisions.
Hasn't Apple somewhat shown their cards already, giving in to any regulation from the Chinese?
Without making all the fuss they did in Europe.
I agree that the reach of potential fines do not really "make sense".
But Apple may be trying to shift its revenue outside - and given how bent Apple is on fighting the regulation, how crafty and clever they try to be and finding loopholes and circumvention, and maliciously their attempts at compliance are, I'm totally unfazed.
No one has given any indication of leaving the EU. We're speaking of markets worth many billions of dollars here, and somebody will have to to have piece of that pie.
Also, if Microsoft, Google and Apple were to leave, Europe certainly has the technological capabilities to replace their ecosystem within relatively short time. Europe may lack behind in commercialising software to consumers and end users. But they have no shortage in software development resources. They're certainly capable of replacing these US' companies products.
And countries/companies in the Far East will want to provide the hardware manufacturing resources.
Why would that be any problem?
I believe this does come down to a question of business culture - where U.S. companies are struggling with such regulation much more than Europeans (or, for instance, the Japanese).
Every anti-competitive and anti-consumer occurrence or trends in software commercialisation have originated from the U.S. - not in Europe. It's primarily the ruthless and largely unregulated (though lawsuit-happy) "winner takes all" and "take it or leave it" U.S. style of capitalism that runs counter to the Digital Markets Act - and which U.S. and Americans are championing as "free market" capitalism.
Contrary to that, companies in Europe, or Japan are much more used to balancing the interests of themselves, their customers and society. For Japan in particular, see their business philosophy of "sanpo-yoshi"). And European companies are more accustomed to "playing fair" with other stakeholders too - and particularly government regulations placed on their business and market competition.
You might even call this hypocrisy. Tim Cook would never dare say a bad thing about the Chinese government in public. I think this is proof enough that Big Tech will put in a lot of effort to retain access to a large customer base. All this talk about leaving the market is just wishful thinking.
I feel the above is a gross mischaracterization of the totality of the circumstances leading to a simple statement that ignores the nuances.
Because at a basic level the issue with the chinese government is different than the issue the EU regulatory body? (you believe it's the same?)
I believe the end results are the same. They both potentially cost Apple extra revenue that they think they are entitled to. Although I deem the European approach to be based much more on the principles of a market economy. The Chinese approach is much more blunt and does not care about competition, as long as Chinese companies win. Their thinking is very much guided by the ideas of mercantilism.
Hence my original statement the totality of the circumstances is different. There is denying Apple isn't a charity (as in a 501-3c in the US) and that apple is a for-profit company. As a result the customer focused decisions have to bring in $$$ or euros or whatever. Everything Apple does along with these regulations all affects the bottom line.
I don’t think the Chinese government has ever made any demands of Apple that would threaten their business model or the overall integrity of their ecosystem, but I could be mistaken in this regard.
Is it really a problem with the US tech industry, or a symptom of the problems brought about by over-regulation in the EU, where the main poster child for innovation is a music streaming company that has never made a profit in its last decade of operations? Maybe the reason why there is even a need for a DMA to help ensure “fairer competition“ in the first place is because all those rules and regulations have effectively choked off any possible innovation there could have been?
Therein lies the “bad“ in the “good“. Everything has its cost, however well-intentioned.
Haha. You haven't heard about them because Apple has never complained publicly
But, yes, there are restrictions in the gaming sector (very lucrative). App store reviews also must be much more relaxed. Otherwise, I don't see how apps like WeChat could ever be allowed on the Chinese app store. Apple also can't be too happy about the government pampering the local smartphone companies and the tech sector in general, while restricting iPhone usage by government officials.
But I'm far from an expert on the Chinese market. So if you're really interested in this topic, do your own research. All I know is from international tech publications.
Spotify is really a separate case that has been ongoing for years. It might have partly inspired work on the DMA, but it is not central to the effort.
Not sure what you're trying to get at?!
I don't think we need to delve into nuances to see that Chinese regulations (such as, already mentioned, on gaming apps) make Apple less money. Apple still puts up with these regulations, cause there's tons of money from the market.
Same is true for the European market. I mean, all I have heard from detractors of the DMA is, how consumers don't want this - so it certainly won't turn Apple from making tons of money in the EU too to operating at a loss.
...not for non-Chinese users.
Neither did the European Union make such demands.
It is a problem once big tech companies (through products that, admittedly, were innovative) have unassailably captured and cornered important markets - and use that to stifle innovation and competition:
Denying competition chokes innovation.
Denying interoperability chokes innovation.
Denying competitors marketing to their customers at the main point of interactions chokes innovation.
👉 The DMA does not choke innovation - certain policies and business conduct by gatekeepers do.
Now, can regulation, interoperability and access requirements stifle innovation?
Yes, I agree they often do in nascent markets.
Could they have impacted or prevented Apple's success store with the iPhone and iOS? Probably, yes.
But mobile operating systems, mobile applications and software application stores aren't nascent markets anymore. They've matured and become a "chokepoint" for a myriad of businesses and their access to their (prospective) consumers.
And it's particularly troubling and undesirable, when gatekeepers leverage these chokepoints to muscle their way past the competition into other, separate markets. Such as what Apple has been doing with music and video streaming and their Arcade and Fitness.
Apple...
- charging commissions
- being compensated for their innovation and work on iOS/the platform
- thereby imposing high transaction costs on third parties
Apple...
- leveraging their pricing, terms and conditions anticompetitively
- to muscle their way past the competition on unrelated (non CPS) services and products
- or "tax" the competition
👉 That is where Apple stifle innovation.
That is what the DMA tries to address.
And that is where regulation is warranted.
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Well, without the Chinese knowledge, ability and competence in technical matters, most or all Apple devices wouldn't have happened. And, without Apple adhering to Chinese regulations (and demands) the whole Apple business would fail. If they are really pushed too hard, there would be chiOS, there'd be nothing anyone can do about it. Without the Chinese the whole tech market would flop.
Without cheap labor you mean. Foxconn assembler in Shenzen makes less than $3/hr.
So, you think they are the people, who make Apple products?
The other matter is what is the buying power of Yuan in China? Is it the same as your $3 in the US?
Another matter is China has its own space station, while the US doesn't.
Foxconn in Shenzen?
Ever heard of a factory like this in the US? Or, some place like Longhua? There are hundreds of such Science & Technology Parks in China.
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Regardless of the nuances you or I may want to argue in the definition of rent, it does not change the fact that rent-seeking activity is fundamental to capitalism.
Same arguments that go around in the same circles. If you believe apple harms you, buy the competition.
...and generally seen as bad for society and the economy.
I can't buy my apps elsewhere (yet).
And there is not enough competition on mobile operating systems.
Shall we go for another round of you claiming that the Samsungs, Oppos and Googles etc. are competition - and me countering that they run the same operating system and you'd have to get relevant apps all from the same store? 😄