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EU Plans to Fine Apple for Anticompetitive App Store Practices
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I am not a tax lawyer, so I may be misstating some things, but what happened was while the EU case was playing out in the courts, the US tax law changed in 2018 and required Apple to go ahead and pay taxes on the Irish subsidiary’s profits. Assuming corporate taxes work the way individual US taxes work, you have to show you’ve actually paid the foreign tax, I can’t imagine having it sitting in an escrow account would count.
(If you want background information on the Irish set up here’s an old post that does a fantastic job of explaining it, but it’s quite long. Same author has a reaction post to the September CJEU ruling).
Again, I don’t think anything will be done in response to this particular ruling. But it will definitely be a point Apple can make to our once and future President that the EU is shaking down American companies (and America). Whether anything comes of that argument or not, no idea. Tend to lean no, but I’ve long ago learned not to assume anything when it comes to that particular politician.
None of those answer the actual points.
1.). Not sure how the individual or business is forced to buy Apple Products here to reach out to People that use Apple products.
Again this is the undertakers business CHOICE to use Apple products to run the business.
Just had my Renault serviced and did via website and response came back via email. Yes I used my iPad however could have been windows Pc or tablet or android that had used.
2.) again no forcing by Apple for people to buy the products, I have shown how even though bought apple products I am not locked in.
3.). Makes no sense at all. No reason for them to have to use Apple products to run an undertakers business. Quite frankly a really poor choice of business to use as undertakers are all about the personal interaction not done at remote distances. Is a very personal business.
How was the undertakers FORCED to get into the Apple EcoSystem to run an undertakers business?
None of this is showing how people are FORCED to buy Apple Products wether as individual or a business.
If going to complain about people exaggerating then really suggest you stop doing it yourself by continuing to try and claim Apple forces people to buy there products.
Key phrase there is WANT to develop apps for iPhone.
developers make a CHOICE to develop for iPhone clearly they are not FORCED too,
how does Apple FORCE you to become a developer? Big hint in case not clear. They DON’T. People clearly choose to become developers.
choices people/business make have consequences. A consequence of the CHOICE to become a developer for iOS is the need to acquire the platform and tools to allow to do the development. Surely as a developer then when making the choice to become an iOS developer then part of that choice is investigating what is required and what the costs are for that. Otherwise the business does a Donald Trump and goes bankrupt.
However that is because of the CHOICE someone/business makes to become involved with Apple development.
And Apple does NOT have most of the market in the EU or the world. There is a large world outside of the USA where Apple does have the largest market share.
Developers choose to develop for iOS as despite the world market share for iOS being smaller the android then when it comes to spending on Apps then not only to iOS users spend more per user but they actually spend significantly more in total despite being a smaller user base.
Like any sensible person then developers choose iOS as the iOS user base spends money and the Android user base doesn’t spend as much so they target a customer base that is more likely to spend money. Everyone know that surely?
It is not.
If you are running an online dating business or a video streaming service (both of which you may have been doing before the advent of the iPhone), the “choice” not to develop apps for Apple’s mobile operating systems isn’t a viable business choice.
You’re not legally forced to - but this is the da facto reality of the business.
Exactly.
And developers can’t afford to ignore the this 50% or more of potential market (in money spent by consumers).
Let alone those when you add to that other software application stores that have (pretty much) the same terms and conditions (the Google Play Store).
70% (or in actuality 85%) of the price is better than 0. Especially on something with 0 marginal cost to add users. Every business has to take overhead into account especially when using someone else’s property to sell their product.
Perhaps it’s something about Apples business model that draws those who are willing to pay and discourages piracy. And therefore Apple should be able to monetize the practices that led to the creation of such a pool of customers. A reward for their innovation in business models.
Particularly because the same people screaming it’s so anti-competitive that draconian regulation is needed spent years screaming that Google’s open model was going to doom Apple to irrelevance. Heads I win, tails you lose.
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Though if you are involved in either, your company would likely be operating at a scale where investing in a couple of Macs for app development is a rounding error on their balance sheet. I doubt anyone here is hosting a video streaming site out of their Mac Mini in their own basement on their own dime.
Or if you are someone like Christian Selig, who was able to make a decent amount of money through his Apollo app before it was shut down, buying a Mac would have paid for itself many times over, and it’s not like you are barred from using said Mac for personal reasons.
If you ask me, buying a Mac for iOS app development hardly sounds like the bank-breaking investment some are making it out to be here. Compared to say, buying a RED camera (and all the accessories) in order to become a film director.
No one is challenging Apple's right to charge as much as they want for their App Store and its in-app purchasing system.
The issue is that Apple has monopolised that market (for digital transactions) and forces developers to use something they don't want (at current rates).
They have been rewarded handsomely and the market is now mature.
There is no innovation in the concept of "App Stores" for mobile phones anymore.
Monopolists in mature markets should not be able to charge as they please for mere access to consumers.
Want to use someone else’s property (iOS) to sell your stuff to the customers they attracted, you play by their rules and pay a commission. No matter how many times you deny it, Apple has competitors in this space that are actually the leaders in the EU market. (And side note: Even on iOS developers are welcome to sell subscriptions to their apps without paying Apple anything.) So Apple has monopolized nothing. If developers don’t like it they can not sell on iOS - problem solved. You’re not entitled to access to and use of another company’s property to sell to that company’s customers just because you want to.
You’re arguing that a mall’s owners should be required to let Apple sell in their mall without paying rent because the mall owners have monopolized the mall’s customers and it’s not fair to Apple to pay for access to their customers.
Just because they’ve already been rewarded handsomely doesn’t mean squat. The fact that the market is now mature also doesn’t mean squat.
KFC doesn’t have to let Chick-fil-a sell their chicken in KFC just because KFC has already been rewarded, the chicken restaurant market is mature, and there isn’t innovation in Fried Chicken anymore.
No matter how many times you say it, Apple is not a monopolist. And because they are not a monopolist, they absolutely should be able to charge what they want to for access to their customers and use of their property. If developers don’t like it they will leave and Apple’s products will suffer for it.
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And so what? And because of that you feel it’s okay to take apples property?
Strictly an opinion and/or business problem
Apple is not a monopolist. And therefore are free to charge the going rate.
You correctly point out that the 2018 U.S. tax reform required companies like Apple to pay taxes on foreign profits under the “Transition Tax” (as part of the Tax Cuts and Jobs Act). This reform aimed to address the issue of deferred taxation on foreign income by imposing a one-time tax on accumulated foreign earnings, regardless of whether those profits were repatriated.
• Clarification on Escrow and Foreign Tax Credits: While you suggest that escrowed funds might not count for foreign tax credit purposes, this depends on whether those funds are recognized as “paid” under U.S. tax law. In Apple’s case, the €13 billion payment was not a voluntary tax payment but a deposit pending the outcome of the EU case. Therefore, it likely wouldn’t qualify as a creditable foreign tax until fully resolved and recognized as a legitimate tax liability.
• EU vs. U.S. Taxation: The U.S. taxation of Apple’s profits does not negate the EU’s concerns. The ECJ case focused on whether Apple received an illegal selective advantage under EU state aid law. Even if Apple eventually paid U.S. taxes on those profits, the Commission argued that Ireland had a duty to tax Apple appropriately based on its economic activity in the EU. Thus, the two issues are distinct and not mutually exclusive.
The blogger’s analysis of the Apple Irish tax case contains several critical misunderstandings of the European Court of Justice (ECJ) ruling and the underlying principles of EU state aid law. Below is an in-depth response to their misinterpretation:
The linked posts provide useful context but contain several misconceptions that do not align with the legal and economic findings of the ECJ ruling:
With two important points from the above text:
• Misinterpretation of Stateless Income: The blogger downplays the issue of stateless income, arguing that U.S. taxation resolves the problem. However, the EU’s case was not concerned with where Apple’s profits were ultimately taxed. Instead, it focused on the unfair advantage Apple received in Ireland through selective tax rulings. These rulings enabled Apple to allocate significant profits to a “head office” that existed only on paper, leaving a substantial portion of income untaxed within the EU.
• Selective Advantage: The blogger characterizes Apple’s tax arrangement as compliant with standard transfer pricing practices. However, the ECJ found Apple’s profit allocation to be artificial and inconsistent with its actual economic activity. Ireland’s tax rulings selectively granted Apple a competitive edge unavailable to other companies, violating EU state aid rules.
Your comment correctly highlights the interplay between U.S. and EU tax policies, but it’s important to distinguish the two issues. The U.S. tax reform addressed deferred taxation of foreign profits. In contrast, the ECJ ruling targeted Ireland’s selective tax rulings and their distortion of competition within the EU. By framing the EU’s actions as a “shakedown,” it oversimplifies the legal and economic dimensions of the case and misrepresents the EU’s enforcement of state aid rules.
I understand your point that businesses can choose to use Apple products, and that no one is physically forced to buy them. However, the issue at hand isn’t about direct coercion but the economic coercion Apple exerts through its ecosystem. Let me break this down:
1. Economic Coercion, Not Physical Force:
You’re right that no one is literally being held at gunpoint to buy Apple products. But Apple’s ecosystem is designed to subtly coerce users and businesses into remaining within its walled garden, primarily through its market dominance. When a business or individual buys into the Apple ecosystem, the cost to exit becomes extraordinarily high. Apple does this by locking users into its proprietary services—iCloud, App Store, iMessage, and FaceTime—creating an environment where the “choice” to leave isn’t as simple as switching to another device. The transition involves both direct financial costs (e.g., replacing hardware, re-purchasing apps) and time-consuming challenges (e.g., migrating data, losing access to services).
So while technically no one is “forced” to buy Apple, the practical costs of switching—whether it’s for a business or an individual—create an environment where people feel trapped, often without viable alternatives that provide the same level of integration and convenience. This is economic coercion, where users are incentivized to remain within Apple’s ecosystem even if it isn’t in their best interest.
2. The Issue of Platform Lock-In:
Your example of servicing your Renault via email doesn’t address the core issue Apple’s market practices present. Businesses like the undertaker, who are dependent on a variety of digital tools, might choose Apple products to interact with customers or manage operations. But once they’ve invested in Apple’s ecosystem, they are locked in. Apple has intentionally made it difficult for businesses to freely move between different platforms. By controlling both the hardware and software, Apple has the power to decide who can offer services on its devices (through the App Store) and at what cost.
The real issue isn’t whether the undertaker could theoretically run their business using other devices. The problem is that many of these businesses rely on Apple’s services to stay competitive. If an undertaker, for example, wanted to use a competing service that Apple doesn’t support or charges exorbitant fees for, the cost of switching would be prohibitive. Apple’s dominance in the mobile and computing space means businesses often must comply with its rules or risk losing access to key customer bases.
3. Apple’s Anticompetitive Practices:
Apple’s decision to not allow alternative app stores or payment systems on iOS directly harms competition and limits consumer choice. The European Union’s investigation into Apple’s App Store practices is based on concerns about how these actions stifle competition and harm developers. By enforcing high commissions and controlling which apps can be offered, Apple effectively forces developers and consumers into its ecosystem, reducing their options for fair competition.
Apple’s system isn’t just a convenient feature; it’s a barrier that prevents other services and companies from thriving. This is why businesses, especially smaller ones, often have no choice but to accept Apple’s terms, even if they are unfavorable. It’s not about “choice” in the sense of freely picking products—it’s about being pressured into a system that makes it difficult to operate outside of Apple’s control. The “freedom” you describe is an illusion when the costs of leaving are so high.
4. The Undertaker Example – Not a “Poor” Business Choice:
Dismissing the undertaker’s decision to use Apple products as a “poor” choice is missing the point. The undertaker, like many other businesses, is likely using Apple devices not just for convenience, but because the platform provides services that reach a large customer base. However, this is the problem: they are forced to comply with Apple’s rules to stay competitive. If Apple’s ecosystem were truly an open market, the undertaker would have the freedom to choose a competing service without fearing lock-in or losing access to valuable features. But this isn’t the case. Apple’s closed system forces them to accept whatever terms Apple sets or face significant disruption to their business.
In short, while no one is literally “forced” to buy Apple products, the economic reality is that Apple’s ecosystem makes it extremely difficult to avoid. For businesses, this can translate to higher costs, limited competition, and a lack of freedom to choose the best tools for the job. This is why the EU is investigating Apple’s practices—they are creating a market environment where businesses and consumers are pressured into staying within their ecosystem, even if it’s not the best choice for them.
The conclusion you get from the above examples is that Apple’s restrictive policies harm the market by reducing competition, hindering innovation, and locking consumers into its ecosystem. While these practices might not create immediate “consumer harm” as defined by US antitrust standards, the long-term harm to innovation, competition, and consumer choice is substantial. The EU’s approach seeks to preempt these issues, ensuring a healthier market that benefits consumers and businesses in the long run.
Perhaps I can agree that the use of the term forced is not appropriate. Apple is still preventing proper competition between competing services to provide a superior experience and product.
1: you can’t do business with iOS users without purchasing Apple as the middleman. And iOS users can’t conduct business without going through Apple as the middleman. And this is regarding providing apps
Example you should be able to get your Renault service from any car dealer that can service your car. If you’re required to only go through Renault then you’re forced to use them.
2: the issue is that you can’t use a competing AppStore like cydia without needing to use Apple as middleman.If you want to sell something in your app you are arbitrarily required to use Apple as the middleman sometimes and not in other cases.
Example you bought a Walmart stovetop and you being forced to only purchase food and pans from Walmart or a force field stops any other competing products from being placed on the stove unless they’ve payed a a core service fee to Walmart.
3:the undertaker isn’t forced as you correctly point out, but an undertaker who wants to develop an app and distribute it and sell a baby shaking game, stream computer games or the equivalent of DoorDash for weed to iPhone users, and if iPhone users want to purchase that. Then Apple shouldn’t get in the way for that being available.
If I want to create an AppStore with only iOS games then I should be able to provide this to iOS users unhindered.
It's apples right to impede anything they want. They are a consumer discretionary for profit company. Dont like the product, don't buy it. The EU is going to choke from it's own regulations.
The automotive landscape has already been defined. If that were to apply to apple, apple would shut it's doors.
That's not an issue.
Yes, and if you don't like that, buy a product that let's you do that. Apple is a lifestyle company creating goods and services. MIght as well regulate gucci as a gatekeeper.
Revisionist much? If Walmart wants to sell you a stove that only walmart pots can work on; the EU solution would be to declare them a gatekeeper. The US solution is to vote with your $$$.
If you want unhindered, buy a platform that allows you to do that.
…unless it isn’t.
Unless it’s restricted by law.
It‘s an issue because it eliminates competition for the distribution of apps.
Gucci is not in a duopoly for any of their types of clothing items.
Neither do they provide an important platform service for a myriad of other companies (developers).
Nor do they lock consumers in to their platform - consumers can freely combine their $500 Gucci belt with any choice of trousers.
…so it the European Union‘s.
As long as long as a competitive market ensures choice and fair prices for businesses and consumers.
Or restricted by bad laws.
It's apples platform.
Gucci has a monopoly on their products.
Gucci provides a core service in their specialty.
They clearly lock people into their platform.
The EUs philosphy is not to grow competition, but take existing intellectual property and give it away. There is only one way for that to go.
All of the nonsense posted above is inline with the nonsense the DMA started. Artificial boundaries and craftily written laws that don't benefit the consumer. Make any company a gatekeeper, make any company important. Gucci is important.
A “core service”?
Locking in customers into their platform?
Gucci?!
We’re drifting into the increasingly bizarre.
Locking in customers into their platform?
Gucci?!
We’re drifting into the increasingly bizarre.
Certain accessibility requirements are imposed on dominant digital platforms to ensure healthy competition on other markets.
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The entirety of the dma is bizarre. Any business can be a gatekeeper if it’s deemed they are important.
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Maybe the EU should look into these anticompetitive practices from a major tech platform?
I was under the impression favoring your own product when the business users of your platform also offer products was highly illegal for tech companies in the EU. Or is that just when the company isn’t European?
I was under the impression favoring your own product when the business users of your platform also offer products was highly illegal for tech companies in the EU. Or is that just when the company isn’t European?
Quote: "I have no reason to believe Apple Music isn't doing something similar"
But I agree they should look into it.
You are condoning and promoting such practices.
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If that is not a typo, (from context, I'd have expected that to read "I have no reason to believe Apple Music is doing something similar), the author should provide evidence rather than throw an accusation.
Honestly, it's Spotify's platform and if they want to fill playlists with crap music generated by AI then that is their business; I suspect they'll find it's not actually in their best interests to do so, but I'm not in the music industry so maybe I'm wrong. While I am not a fan of Spotify, this isn't something that actually rises to the level of "the EU needs to get involved."
My point was to highlight the EU's hypocrisy of intentionally writing the DMA to avoid Spotify, and to show that the arguments by many here that "Spotify doesn't gatekeep anything and that's why the DMA excludes them" is patently false.