Apple Says New EU Interoperability Rules 'Bad for Our Products and Our Users'

[AppliedMicro]

Why would I bother investing money to make my headphones pair better if I immediately had to give that ability to a competitor who didn't spend any of the money to create the feature and they could undercut me on price? It completely changes the ROI calculation for literally every feature in the OS.

Why would I bother investing money into my headphone company and make my headphones sound (or pair better) if a dominant smartphone developer just shut me out and prevent my products from connecting just similarly well to those phones?

But let's carefully read your question again:

Why would I bother investing money to make my headphones pair better if I immediately had to give that ability to a competitor who didn't spend any of the money to create the feature and they could undercut me on price? It completely changes the ROI calculation for literally every feature in the OS.

Answer:
Because you are in the business of selling bloody smartphones with your own operating system!
That is why you develop "OS features" to make headphones pair better!

But selling phones is not the only thing Apple are doing, of course.
They're also selling headphones, competing with a myriad of other headphone makers.

And that is precisely where the regulation comes in:
👉 If you have a dual role as both a) a smartphone manufacturer/OS developer and b) a headphone manufacturer, the law prevents you from anticompetitively leveraging your dominant position in the smartphone market to distort fair competition on the market for headphones.

To be absolutely clear here:
Apple are free to develop and sell "features in the OS" in any way they like. And monetise them and their IP to recoup their expenditure in developping the feature. They can, for instance, license the technology to headphone manufacturers, for instance. No one says Apple have to produce headphones in the first place. But once they decide to compete on the headphone market (or streaming market, for instance), they have to play fair.

A firm with monopoly power on one market (mobile operating systems) is lawfully restricted from leveraging their that power anticompetitively in other, related markets (the headphone market).

 

[deevey]

Right
So you think it’s un-competitive to allow competitors access to features that will allow it to work better with your mobile
Than to keep the way it is to deliberately give your products the advantage because you have access to the features that make it work that you won’t allow competitors access too

Yes if you developed it.

If it's something "required" for the good of everyone, it could be a mandated RAND license.

If competitors were actually competing they would develop equivalent (or better) technology that they could do the same for rather than try to ride the coat-tails of innovators.

 

[surferfb]

Why would I bother investing money into my headphone company and make my headphones sound (or pair better) if a dominant smartphone developer just shut me out and prevent my products from connecting just similarly well to those phones?

Maybe they should have worked with Android or Apple to jointly develop a better solution for the decades that Bluetooth devices existed with terrible pairing interfaces.

And they are still perfectly welcome to develop amazing features or better sound quality that makes dealing with a worse pairing system worth it for users. But give away Apple’s invention for free? Come on.

But let's carefully read your question again:

Answer:
Because you are in the business of selling bloody smartphones with your own operating system!
That is why you develop "OS features" to make headphones pair better!

The existing way of pairing headphones was apparently fine for everyone until Apple came out with a new way, and then all of a sudden it’s “anticompetitive Apple” daring to keep that improvement they built for themselves to be justly rewarded for making things better. They’re not even suing Android and headphone manufacturers from aping the design of AirPods and implementing a similar innovation with pairing.

How dare they invest millions and millions of dollars to make things better for themselves without giving their invention away to their competitors. The gall.

 

[Atog]

Do you have any more insightful and well thought out comments to offer us?

No, I live in EU I have no more words for this commie-like stupid idiocracy, anyone who doesn’t understand it by now is part of the problem.

The sooner it will ends the better for everybody.

 

[AppliedMicro]

And they are still perfectly welcome to develop amazing features or better sound quality that makes dealing with a worse pairing system worth it for users.

Having to choose between either a) inferior sound quality or b) inferior pairing/connectivity is undesirable from a consumer perspective. I'm not saying trade-offs need not be made by manufacturers or consumers. They're perfectly acceptable in competitive markets.

But they're not acceptable when they're extrinsically imposed (in the headphone market) by a company leveraging its monopoly power in a different market (the one for smartphones/mobile OS).

How dare they invest millions and millions of dollars to make things better for themselves without giving their invention away to their competitors

No, competing headphone manufacturers still have to develop and implement the feature.
They're merely given the opportunity the interoperate with the biggest smartphone platforms and compete on a level playing field with other headphone manufacturers - that just happen to develop smartphone operating systems.

 

[cupcakes2000]

Apple has somewhere between 25-30% of the EU market. So yes, unless the way math has changed in the EU since I lived there, by definition they are the minority player in the market.

A one third share of a two player game. Yeah. Minority player. Poor Apple.

What would they do without all of these nice internet people jumping to their aid against big bad consumer rights and abusive level playing fields.

If only they were the richest company in the world. And if they were, if only it was that one third minority share they have that got them there. Now wouldn’t that be ironic.

 

[surferfb]

Having to choose between either a) inferior sound quality or b) inferior pairing/connectivity is undesirable from a consumer perspective. I'm not saying trade-offs need not be made by manufacturers or consumers. They're perfectly acceptable in competitive markets.

But they're not acceptable when they're extrinsically imposed (in the headphone market) by a company leveraging its monopoly power in a different market (the one for smartphones/mobile OS).


No, competing headphone manufacturers still have to develop and implement the feature.
They're merely given the opportunity the interoperate with the biggest smartphone platforms and compete on a level playing field with other headphone manufacturers - that just happen to develop smartphone operating systems.

Going back and forth on this for a billionth time isn’t going to change our mind on this, so I’ll say I disagree and call it an evening.

Hope you’re doing well!

 

[Stuwil]

Yes if you developed it.

If it's something "required" for the good of everyone, it could be a mandated RAND license.

If competitors were actually competing they would develop equivalent (or better) technology that they could do the same for rather than try to ride the coat-tails of innovators.

What are you on about?
It’s to do with things like AirPods for example having seamless integration with the operating system & Apple controls that so that then gives them an advantage over the competition because they own the operating system you can’t have it both ways

 

[Stuwil]

Maybe they should have worked with Android or Apple to jointly develop a better solution for the decades that Bluetooth devices existed with terrible pairing interfaces.

And they are still perfectly welcome to develop amazing features or better sound quality that makes dealing with a worse pairing system worth it for users. But give away Apple’s invention for free? Come on.


The existing way of pairing headphones was apparently fine for everyone until Apple came out with a new way, and then all of a sudden it’s “anticompetitive Apple” daring to keep that improvement they built for themselves to be justly rewarded for making things better. They’re not even suing Android and headphone manufacturers from aping the design of AirPods and implementing a similar innovation with pairing.

How dare they invest millions and millions of dollars to make things better for themselves without giving their invention away to their competitors. The gall.

Again you miss the point of the whole thing
Apple are owners of the iPhone & the operating system.
They can’t have it both ways by selling headphones & then making features available for it to seamlessly connect to said product that they make as that is giving them advantage over the competition

 

[surferfb]

Again you miss the point of the whole thing
Apple are owners of the iPhone & the operating system.
They can’t have it both ways by selling headphones & then making features available for it to seamlessly connect to said product that they make as that is giving them advantage over the competition

I’m not missing the point; I fundamentally don’t agree with your point.

I think they should be able to have it both ways, and in fact, it’s actually better for consumers that they do, because that is what leads to innovation.

 

[TracesOfArsenic]

Good for Apple for at least trying. Freeloaders are going to benefit from apples IP, but Apple won’t.

I've been an Apple user for 20+ years and I welcome their competition to have all their cards exposed. It'll encourage innovation and Apple will have to try harder, like they used to when they weren't so dominate. When Apple is forced into a corner and has to fight to survive they're a dangerous company and come up with their best products.

 

[Stuwil]

I’m not missing the point; I fundamentally don’t agree with the point. I think they should be able to have it both ways, and in fact, it’s actually better for consumers that they do, because that is what leads to innovation.

Explain how can it lead to innovation when Apple deliberately doesn’t allow competitors access to software that would allow them seamlessly connect with the OS in the first place. In fact what Apple do stifles innovation because if companies had access to that stuff then it would force companies to make better products

 

[Suicidy]

Boo hoo. Large company doesn't like regulations that hurts their bottom line and benefits consumers.

What else is new?

While the EU is far from perfect, most of their regulations are well-meaning.

Yeah, a lot of you…… individuals…… have this perspective. Rather than tell you how wrong you are, I’ll just leave you with a passage from the great CS Lewis.

Quote​

(?)

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be "cured" against one's will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.”​

 

[surferfb]

Explain how can it lead to innovation when Apple deliberately doesn’t allow competitors access to software that would allow them seamlessly connect with the OS in the first place. In fact what Apple do stifles innovation because if companies had access to that stuff then it would force companies to make better products

Because if Apple is required to give away its innovations to those who did not pay for the research and development that led to those innovations, Apple has no incentive to innovate.

If I spend $50 million dollars to develop a new pairing system for my headphones, but I’m required to give that invention away to competitors who didn’t spend $50m to create it, they can effectively undercut me on price. I’m at a competitive DISADVANTAGE for having done so, because I just made my competitors products better without being able to profit on the exclusivity of that feature in my products. So new features stop coming out and innovation stagnates.

If the EU had said something like “Apple can keep a feature exclusive for 3-5 years, but then must create a public API for it” I might agree with you.

But they didn’t say that. They said the second a feature comes out, Apple must allow its competitors to use it. Which will absolutely chill innovation, or more likely, means Apple withhold innovations from the EU for years until it gets the ROI from the rest of the world.

 

[AppliedMicro]

If I spend $50 million dollars to develop a new pairing system for my headphones, but I’m required to give that invention away to competitors who didn’t spend $50m to create it

You aren't.
Apple aren't.

You can sell (license) it to smartphone manufacturers.
Or headphone manufacturers.
For money.
Or use it to sell phones.

So can Apple.

 

[OLDCODGER]

I see that the EU has gone back to medieval medicine to cure their sick - using leeches, only electronic ones this time!

 

[surferfb]

You aren't.
Apple aren't.

You can sell (license) it to smartphone manufacturers.
Or headphone manufacturers.
For money.
Or use it to sell phones.

So can Apple.

No they can’t. From the regulation introduced today (emphasis mine):

• All features on Apple will have to enable interoperability for any type of connected device, free of charge, via complete, accurate and well-documented frameworks and APIs.

Edit to add: I fully admit there are downsides to my approach. I just think the EU’s approach is the equivalent of amputating an arm when stitches would have fixed the issue.

 

[AppliedMicro]

No they can’t

Yes they can.

From the regulation introduced today (emphasis mine):

Straight from the regulation:

"The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper."

👉 Nothing is saying Apple has to enter or stay in the headphone market or market that feature in that market.

But if they do (decide to market headphones), they can't leverage their monopoly power in the smartphone market to unfairly compete with other headphone manufacturers.

And again, it's only about interoperability with their smartphone platform. If Apple innovate into existence the best noise-cancelling or bass response on the planet for their headphones, they can keep and monetise that feature exclusively.

 

[surferfb]

Yes they can.

Straight from the regulation:

"The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper."

Yes, so if they use it in their products, they cannot profit from it unless they give it away to their competitors immediately. Proving my point. Apple isn’t in the business of making features for other companies, they’re a hardware manufacturer.

Aren’t you at least a little concerned that innovation might be harmed? Even if you think overall the DMA is worth it?

 

[AppliedMicro]

Yes, so if they use it in their products, they cannot profit from it

Of course they can.

Making better-pairing headphones and selling them profits them.
So does making better-pairing smartphones and selling them.

 

[AppliedMicro]

Aren’t you at least a little concerned that innovation might be harmed?

I am.

Withholding basic connectivity features (such interfacing with a smartphone OS with an entrenched duopoly market position) will harm innovation in related markets for accessories and services.

👉 Competition in the headphone market should be about...

• better sound
• battery runtime
• price and "bang for the buck"
• looks and design
• best ergonomics
• etc.

It should not be about "We can phone in a mediocre-sounding product at inflated prices. Just cause we have a large and entrenched position on the important related (but separate) market for devices that headphones connect to."

Interoperability ensures competition that benefits consumers.
Monocultures and technical "tying" of different types of products (headphones and smartphones/their OS) do not.

 

[surferfb]

Of course they can.

Making better-pairing headphones and selling them profits them.
So does making better-pairing smartphones and selling them.

But they’re only allowed to do so if they make their competitors better for free.

If this isn’t going to harm competition, why not apply it to every company? Why single out big tech? Should ford be able to use BMW’s infotainment system for free? No harm done, right? BMW still has reason to innovate. Can Boeing start using Airbus’ Airplane designs for free? I mean, Boeing clearly needs the help and Airbus still has reason to spend money to design the planes, right?

 

[jdawgnoonan]

No, quite the opposite. The EU wants that you can use the OS you want and don't have to worry about it. You can use a Mac, an Android phone, a Linux server, and a HomePod or Apple TV. Today, such a combination would not work seamlessly together.

It is like rural people who are against a frequent bus service to their village, saying it would undermine the right to choose. Even though they don't have a choice right now.

I really should say scientists to check out these discussions threads about regulations, maybe it explains more than we think about our world.

I mean, people calling this regulation a "nanny state" while also welcoming the "nanny state of Apple" because they "choose" it. I would argue, that you didn't choose Apple.

I bounce back and forth between Android and iOS every few years, so yes I chose Apple. So what is next? Will Apple be forced to remove the other differentiation that makes iOS work so well with Macs and iPads? My iPhone and my other Apple devices are practically like one device. I guess Apple is somehow evil for making their products work so well with one another. The phone link app on windows for android is a joke even though it is far better than iOS on windows with phone link. With my Mac I’m practically on the same device. Will Apple be required to make up for the fact that windows and android can’t do it as well?

 

[AppliedMicro]

If this isn’t going to harm competition, why not apply it to every company? Why single out big tech? Should ford be able to use BMW’s infotainment system for free? No harm done, right? BMW still has reason to innovate.

When market concentration is as low
and competition is as diverse and intense
between mobile operating systems
as it is on the market for cars
Apple should be able to do what they want
free from such government regulation as the DMA.

That we can agree on.

 

[surferfb]

When market concentration is as low
and competition is as diverse and intense
between mobile operating systems
as it is on the market for cars
Apple should be able to do what they want
free from such government regulation
as the DMA.

That we can (probably) agree on.

I do agree with that (I don’t agree that regulations like the DMA should exist at all), but I’d point out that Boeing and Airbus are pretty much the only players in aircraft manufacturing, have giant industries of companies that depend on them for business like developers and peripheral manufactures depend on Android and iOS, and get none of the EU’s ire. I wonder why that is? Couldn’t possibly be because Airbus is European, now could it?

And before you say they don’t behave anti competitively, look into exclusivity agreements, required maintenance contracts, etc.