EU Plans to Hit Apple With Antitrust Charges Over Apple Pay

[Nuno Lopes]

The government dictates the hardware use?

It regulates in some Industries. There is a difference between regulation and dictation.

 

[Unregistered 4U]

Nope. This is your strawman that you built all by yourself. Congrats, I suppose.

I’ll make it simpler for you. If the iPhone was not selling well in the EU, if Apple was NOT successful in the EU, there would be no EU actions being taken against Apple.

 

[I7guy]

It regulates in some Industries. There is a difference between regulation and dictation.

Sure, in industries where the hardware is responsible for life and limb I can understand regulation such as healthcare.

 

[I7guy]

Oh dear that one again. How many market crashes after that. I mean,

Yep, government screwed up there also. But corrections were put into place.

The market can be run by a bunch of crooks and corrupts at one time and lead people to misery and some to new highs … its all part of the game … state money to the rescue … the state makes a not so good decision it’s a sin that hunts the org for ever. Geee

Hehehe.

How bad it can get? To whom? I mean, regulation is working as it ever worked across all industries. There is no special process going on because it’s Apple, or because it’s big tech.

There should be a limit to government overreach.

 

[Nuno Lopes]

Yep, government screwed up there also. But corrections were put into place.

Right there. This is why regulation exists and should be enforced and updated consistently. Some people take responsibility for none of their doings on their properties and others while complaining about state regulations. When the money hits the shred, it’s not their fault it’s the always the state that hasn’t kept the machine in check. Money is the only thing that talks they say .

The democratic state are guilty of having a dog and not having a dog … it can never be right. Only the money talks.

Yes. I know … the limit is Apple.

 

[weckart]

I’ll make it simpler for you. If the iPhone was not selling well in the EU, if Apple was NOT successful in the EU, there would be no EU actions being taken against Apple.

I'll make this even simpler for you. The EU has jurisdiction over the EU only. If Apple were not selling in the EU, why would the EU interfere in the US/China/wherever else? However Apple does trade in the EU and complaints have been loud about its tactics, so the EU is bound to step in.

What’s laws of the land? The government dictates the hardware use?

Well, yes. This is why plugs come fitted by law in the UK, must adhere to UK standards of design and manufacture and, depending upon power load must be fused and earthed. Hardware use, as you put it, has been a feature of legislation the world over since forever. Welcome to law and order. If you want caveat emptor to be the sole determinator of how and why companies design, produce and market their wares, try buying a no-name but "Apple compatible" charger from AliExpress to use on your Apple equipment and see how that goes.

As for Apple's implementation of off-the-shelf NFC chips (such innovation), look at monopoly/anti-trust legislation. It has existed since before the iPhone was even conceived, so your incredulity here isn't even cute.

 

[I7guy]

I'll make this even simpler for you. The EU has jurisdiction over the EU only. If Apple were not selling in the EU, why would the EU interfere in the US/China/wherever else? However Apple does trade in the EU and complaints have been loud about its tactics, so the EU is bound to step in.

Well, yes. This is why plugs come fitted by law in the UK, must adhere to UK standards of design and manufacture and, depending upon power load must be fused and earthed. Hardware use, as you put it, has been a feature of legislation the world over since forever. Welcome to law and order. If you want caveat emptor to be the sole determinator of how and why companies design, produce and market their wares, try buying a no-name but "Apple compatible" charger from AliExpress to use on your Apple equipment and see how that goes.

As for Apple's implementation of off-the-shelf NFC chips (such innovation), look at monopoly/anti-trust legislation. It has existed since before the iPhone was even conceived, so your incredulity here isn't even cute.

As I said the EU will get what it deserves, ultimately. Second class technological citizens. Pure governmental overreach.

 

[I7guy]

[...]

Yes. I know … the limit is Apple.

No google and Facebook as well. But we’re not discussing them in this thread.

 

[weckart]

As I said the EU will get what it deserves, ultimately. Second class technological citizens. Pure governmental overreach.

It is less a matter of governmental overreach on the part of the EU, rather neglect on the part of the US government. This is why Apple gets hit with class action after class action. Somebody has to hold Apple and other multinationals to account with whatever tools lie at their disposal.

But, as you said, you get what you deserve, and clearly, that is to be second-class consumers.

 

[I7guy]

It is less a matter of governmental overreach on the part of the EU, rather neglect on the part of the US government. This is why Apple gets hit with class action after class action. Somebody has to hold Apple and other multinationals to account with whatever tools lie at their disposal.

But, as you said, you get what you deserve, and clearly, that is to be second-class consumers.

Class action lawsuits are easy to file, if the loser pays court costs, they would virtually disappear. The US government judicial system in the epic vs apple lawsuit should tell some of what you need to know about “neglect.”

Granted this is the EU, but it’s still my opinion this is over reach.

 

[Nuno Lopes]

As I said the EU will get what it deserves, ultimately. Second class technological citizens.

I understand that you would get along better with China than the EU

Anyway, EU would be fine without Apple if the company decides to drop the ball. Apple really only become relevant in the last decade even though I’ve been a user since 1997. Don’t know how good will be Apple shares if that is the case … that would be innovation I guess

I think you may be confusing some things … also as a shareholder I’m glad you are no Apple adviser … I suppose. Apple has nothing to gain from being outside the EU. Absolutely nothing.

 

[Unregistered 4U]

I'll make this even simpler for you. The EU has jurisdiction over the EU only. If Apple were not selling in the EU, why would the EU interfere in the US/China/wherever else? However Apple does trade in the EU and complaints have been loud about its tactics, so the EU is bound to step in.

They trade in the EU and are successful. Remove that last bit, and the EU does nothing, as shown when the iPhone 6 launched with initial NFC support. They were aware of the support, didn’t see Apple as being dominant and was like “Fine”. Jump forward several years later, Apple has worked hard to increase the sales of their phone and increase the visibility and usefulness of Apple Pay, and NOW it’s “Well, there’s more money here than we expected there to be, time to start the skimming! Or, at least, force open a hole for EU companies to take advantage of.“ The EU in effect, is saying, “Do business here, but please don’t be very successful with our citizens (especially not to the detriment of our EU based companies) or we’re coming for you!” Which, sure, if that’s the way the EU wants to work, fine. But no one should be under the misapprehension that this is “fair and impartial” regulation.

If there was such a hue and cry when the iPhone 6 was released, then THAT would be just regulation as expected, business as usual. As it is, 5 years after the fact to go “Wait, you know what I’m NOT good with this NOW…” it’s regulation strictly because Apple are unfortunate enough to have built a device and a payment system that people in the EU desire and want to use.

 

[weckart]

They trade in the EU and are successful. Remove that last bit, and the EU does nothing, as shown when the iPhone 6 launched with initial NFC support. They were aware of the support, didn’t see Apple as being dominant and was like “Fine”. Jump forward several years later...

Nope. It takes years for the EU to act. Always has and people moan about how slowly it moves, when it moves at all. Like I said, heavy hints are dropped along the way but eventually a deaf ear leads to action taken. If you really think a consortium of 28 27 countries bases its legal fights on petty envy and fits of pique, you have another think coming. The same rules apply to small businesses as to commercial behemoths.

 

[Unregistered 4U]

heavy hints are dropped along the way

The FIRST call the EU made was… “It’s fine.” Maybe they just aren’t that good at dropping heavy hints because that hint was the exact opposite of current actions. What’s different between then and now? Apple’s been successful.

bases its legal fights on petty envy and fits of pique

It bases its legal fights on what is of benefit to it’s member states, NOT envy, NOT fits of pique. It would be VERY beneficial to companies in its member states to have access to Apple’s NFC now that Apple has done the work to make the iPhone popular and successful with EU citizens. And, those companies will most assuredly get what they want, which is, primarily, a way to increase their financial fortunes on the back of a successful company.

 

[weckart]

The FIRST call the EU made was… “It’s fine.”


It bases its legal fights on what is of benefit to it’s member states, NOT envy, NOT fits of pique. It would be VERY beneficial to companies in its member states to have access to Apple’s NFC now that Apple has done the work to make the iPhone popular and successful with EU citizens.

Your first assumption is false but keep banging that drum if it makes you feel better.

Second, popular and successful is relative when it comes to the EU, where Apple's best market by far has left the Union and where its performance elsewhere is middling to underwhelming. It's certainly no Samsung. In that respect, it's not as if the EU is clobbering its biggest player.

As for the opposition, they have done rather well without having to resort to the anti-competitive tactics that Apple has employed. Not that they wouldn't given a chance but the EU is not the market that will give them a chance. As said before, if you want access to the market, follow the house rules and don't whine about it like you have. If you don't want to, there's always China or India. Good luck with those.

 

[Nuno Lopes]

They trade in the EU and are successful. Remove that last bit, and the EU does nothing, as shown when the iPhone 6 launched with initial NFC support. They were aware of the support, didn’t see Apple as being dominant and was like “Fine”.

Yes. That is how the thing works … even in the States. There are many conditions one of them a substantial business volume in order to be a candidate …

Antitrust in 60 Seconds: Tying and Bundling - Disruptive Competition Project

The latest in the Antitrust in 60 Seconds series, this post explores tying and bundling

www.project-disco.org

Before going on and rampage over EU on this topic, please understand that your country, I suppose its the US, also shares these concerns and apply similar reasonings in these kinds of contexts. I don’t know why the gov is not on to Apple considering it was on to MS some years ago regarding similar tactics … maybe has to do with the trillion dollar thing … a darling …

Now back to the EU, I know at least one EU country where there is a contactless payment system way superior to Apple Pay, is way more wide spread, offer more features, supports more kinds of payment cards, its multi platform … so on and so forth. Yet because Apple is tying / bundling Apple Pay with the iPhone capabilities not only denying the consumer the ability to fully use this service, case in case NFC / contactless, something not happening in other smartphones. The system has to resort to use CRC reading with the camera. Now Apple is definitely using their iPhone market share to get into this market by using iPhone users ransome to press on finantial systems to struck deals with Apple for contactless payment on the device.

Now you may argue, well choose another phone if you are unhappy with Apple Pay. Well, the fact is people don’t choose smarphones based on this criteria alone, in fact you just need to look at the latest Apple sales pitch for the new iPhone to understand what is in effect being sold to the user, hiding behind the scene the above.

The fact is, many if not all of the things Apple bundles / ties on it smartphone are traditionally considered distinct products for starters. There is not one of this in the system with no prior art of being a distinct product. Apple is giving a lessons in how to tie while flying between the rain drops …

This tactics are usually seen as anti-competitive if not unfair to the consumer.

Indeed Apple is a long way from SJ product management and bets … looking at its history in Apple.

Cheers.

PS: Now as an engineer I think there some technical benefits in putting things together rather than separate components … there are mechanical affinities that can be explores that would not be as easy otherwise. But this does not mean that the system needs to be entirely closed to external components, components being software.

As an Apple customer and admirer I have no problem with the company picking up subject matter that is poorly built or even non existent and make it really really so much better … like they did with the iPhone. Now I do have a problem when they pick up something that already exists from third parties and work very well yet trumps its way through using tactics as the above. This has been happening lately quite often … Apple TV+, Apple Pay, Apple Music … heck even Smart Speakers …”Sherlocking” and bundling at the highest level. Kind of reminds me of Microsoft some time ago.

Today a very long way from SJ product management legacy.

 

[I7guy]

Yes. That is how the thing works … even in the States. There are many conditions one of them a substantial business volume in order to be a candidate …

Antitrust in 60 Seconds: Tying and Bundling - Disruptive Competition Project

The latest in the Antitrust in 60 Seconds series, this post explores tying and bundling

www.project-disco.org

Suppose if the US courts consider the App Store to be two products or one and the courts find Apple to be in a monopoly, which they haven’t.

 

[Nuno Lopes]

Suppose if the US courts consider the App Store to be two products or one and the courts find Apple to be in a monopoly, which they haven’t.

Read de links about tieing, in American English writing, being a monopoly is not a requirement to be trialed and found for abusive tying. Don’t know where you got that requirement from from the writing … pocket?

1. Two Products: The tying and tied products must be separate products. This question is sometimes more difficult than it would seem. For example, one case turned on whether anesthesiology services were a tied product to the facilities and services provided by the hospital. The Supreme Court decided these were two separate products. The test outlined by the Court was to determine the character of demand for the two items and whether they are “distinguishable in the eyes of buyers”, not the functional relationship between the products. - Easy to prove …. there are plenty of products of the kind of Apple Pay with no tying to smartphone device … in fact Apple Pay may be the exception.
2. Proof of Conditioning: The tying must be forced on the buyer. If the buyer is free to take either product by itself, there is no tying problem. However, there may still be a violation if the seller’s pricing policy makes the purchase of the products together the only viable economic option. - Easy to prove, can you use Apple Pay without an iPhone? … Guess not.
3. Sufficient Economic Power: In a 2006 case, the Supreme Court clarified that “in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product.”. Oh yes, Apple has market power In the smartphone market place … surely no?
4. Substantial Commerce in the Tied Product: There must not be an insubstantial amount of interstate commerce foreclosed by the tie, in terms of the absolute dollar amount affected. However, courts have found that amounts as small as $10,091 have met this test. - Easy to prove … I suppose Apple Pay business is already way substantial.
5. [In Some Districts] Competitive Effect in the Tied Product Market: Some courts have applied a fifth test: whether the conduct had an anticompetitive effect in the tied product market. This requirement is not universally accepted and there is no consensus on the degree of anticompetitive effect required even among the courts that have applied it. - Easy to prove, just gave an example on a previous post, that indeed hurts device users.

Being a monopoly or not bare no relevance to this. Many many ties this thing has. At the moment the entire strategy for Apple business growth is based on tying when entering new markets and product improvements

 

[I7guy]

Read de links about tieing, in American English writing, being a monopoly is not a requirement to be trialed and found for abusive tying. Don’t know where you got that requirement from from the writing … pocket?

1. Two Products: The tying and tied products must be separate products. This question is sometimes more difficult than it would seem. For example, one case turned on whether anesthesiology services were a tied product to the facilities and services provided by the hospital. The Supreme Court decided these were two separate products. The test outlined by the Court was to determine the character of demand for the two items and whether they are “distinguishable in the eyes of buyers”, not the functional relationship between the products. - Easy to prove …. there are plenty of products of the kind of Apple Pay with no tying to smartphone device … in fact Apple Pay may be the exception.
2. Proof of Conditioning: The tying must be forced on the buyer. If the buyer is free to take either product by itself, there is no tying problem. However, there may still be a violation if the seller’s pricing policy makes the purchase of the products together the only viable economic option. - Easy to prove, can you use Apple Pay without an iPhone? … Guess not.
3. Sufficient Economic Power: In a 2006 case, the Supreme Court clarified that “in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product.”. Oh yes, Apple has market power In the smartphone market place … surely no?
4. Substantial Commerce in the Tied Product: There must not be an insubstantial amount of interstate commerce foreclosed by the tie, in terms of the absolute dollar amount affected. However, courts have found that amounts as small as $10,091 have met this test. - Easy to prove … I suppose Apple Pay business is already way substantial.
5. [In Some Districts] Competitive Effect in the Tied Product Market: Some courts have applied a fifth test: whether the conduct had an anticompetitive effect in the tied product market. This requirement is not universally accepted and there is no consensus on the degree of anticompetitive effect required even among the courts that have applied it. - Easy to prove, just gave an example on a previous post, that indeed hurts device users.

Being a monopoly or not bare no relevance to this. Many many ties this thing has. At the moment the entire strategy for Apple business growth is based on tying when entering new markets and product improvements

Like everything else in life, some things are a matter of discretion. I don't know youre background, but I don't have a degree in law, but I do not that unless the laws change and regulators successfully go after Apple nothing will change. The court has dismissed most of the counts in Epic vs Apple, that's a good first step. Not that the appeals can't take a different turn, but it seems the judge in the very lengthy ruling has gone to great lengths to document the findings and reasoning such that the counts will not be overturned. OJ was acquitted, there is no one else that could have done the crime, history shows. That's an example of how things don't always work out the way one thinks. "If the glove don't fit, you must acquit."

 

[Nuno Lopes]

… unless the laws change and regulators successfully go after Apple nothing will change.

True. But that is not what you have said. You’ve you established the requirement to be a Monopoly … that is not a requirement. In fact the referred trial, even though the Judge has not concluded that Apple was a Monopoly, it concluded that opposite, still it did order Apple to fully loose the tie between App and Digital Services payments from the App Store. That is what it means … to allow payment to be processed by third parties including devs … loose that tie from the App Store Apple.

So you, see, no Monopoly was necessary to “crush” a tie.

Now, both parties are unhappy with the outcome of course. Apple in one had wants to put in the most ties it can get away with, loosing one such as this is not good. Epic in other hand wanted Apple to loose more ties … in particular wanted Apple to detach the App Store from iOS.

In my opinion the end result that Epic is looking for is totally, totally stupid. One thing for a dev to be payed as he wishes, removing all and any middlemen if it can when it comes to selling their products and services, in particular within its Apps. Another thing is Epic wanting to open their own App Store within iOS when Apple App Store does not even compete with them by any means. Finally another thing, are Stores not even selling Apps, say selling books, video streams, game streams, training, health and fitness services and so on … being required to pay their doe to Apple when in app … well now they don’t need to … But there is still problem, because of this some can’t even install their App as a corollorary to in App payment ties … which should have been addressed and broken by the Judge easily.

What the Judge ordered has far more ramifications than you may think it has. In no way this was a win to Apple. Should I say, neither Epic. It was a win to devs who don’t aren’t in the business of making App Stores. These are now free to decide how and when they are payed offering their customers multiple options along with the App Store payment service.

It is also a win to users. I always found a nuisance to subscribe business applications for our company, that I could not do it in app. Now its possible … unless of course the order is reversed … we will see.

 

[I7guy]

[…]

What the Judge ordered has far more ramifications than you may think it has.

Maybe, I don’t know.

In no way this was a win to Apple. Should I say, neither Epic. It was a win to devs who don’t aren’t in the business of making App Stores.

It’s not really a win for devs as they still have to pay apple. It’s a win for Apple because their business model stood.

 

[Nuno Lopes]

It’s not really a win for devs as they still have to pay apple.

Well. It is. Because devs never minded paying for what they use, to Apple or anyone else. They will have to pay whatever pricing Apple defines for licensing their APIs and App Hosting services. At the moment that is “free” really, but things will change … will see how much. But notice … look at the article I’ve linked to …

1. Proof of Conditioning: The tying must be forced on the buyer. If the buyer is free to take either product by itself, there is no tying problem. However, there may still be a violation if the seller’s pricing policy makes the purchase of the products together the only viable economic option. - Easy to prove also here.

In other words. If Apple pushes the prices regarding the above to a space where the licensing and app hosting costs t is economically the same or higher than simply adopting the current in-app purchase service … Huston we have a problem.

Don’t know were you got the idea that paying for what you use is a loose game. A win-loose or loose-loose game is not be fully payed for what you offer as of required to share your value (large business percentage) it with a third party because you litterly do not have other option to keep in that market, a hurdle that you can never overcome in the current scheme … cutting the middleman is never possible.

In my opinion, instead of fighting this, Apple should bite the bullet and offer a tiered service pricing based model on what developer want to use and what they do not. As I’ve explained before. This is something that the Windows Store for a long time …

PS: I was a great adept of the current App Store modus operandi regarding payment and fees. I really was. But there was kind of a pax understood with Steve Jobs that Tim has broken once he died. We, the devs share our value with Apple and Apple innovate the platform greatly bringing back more value to us or potential … but that is not really happening in the last 6 years or so. Precisely the opposite … iPad OS is dragging their feet in evolution with minor update every year, iOS same thing, Siri is dumber by the second and still mostly closed to devs and the cherry on top of that new products are coming out even more tightly closed, made mostly for Apple services not to empower devs but cutting them off … not to mention Apple building digital services rivaling devs services when it can, if not sherlocking some into the system. Get the Tim picture? IMHO Tim has broken developers trust and we can see that by the number of innovative apps coming out for iOS … social networks, photo filters and little else.

 

[I7guy]

Well. It is. Because devs never minded paying for what they use, to Apple or anyone else. They will have to pay whatever pricing Apple defines for licensing their APIs and App Hosting services. At the moment that is “free” really, but things will change … will see how much. But notice … look at the article I’ve linked to …

1. Proof of Conditioning: The tying must be forced on the buyer. If the buyer is free to take either product by itself, there is no tying problem. However, there may still be a violation if the seller’s pricing policy makes the purchase of the products together the only viable economic option. - Easy to prove also here.

In other words. If Apple pushes the prices regarding the above to a space where the licensing and app hosting costs t is economically the same or higher than simply adopting the current in-app purchase service … Huston we have a problem.

Don’t know were you got the idea that paying for what you use is a loose game. A win-loose or loose-loose game is not be fully payed for what you offer as of required to share your value (large business percentage) it with a third party because you litterly do not have other option to keep in that market, a hurdle that you can never overcome in the current scheme … cutting the middleman is never possible.

In my opinion, instead of fighting this, Apple should bite the bullet and offer a tiered service pricing based model on what developer want to use and what they do not. As I’ve explained before. This is something that the Windows Store for a long time …

PS: I was a great adept of the current App Store modus operandi regarding payment and fees. I really was. But there was kind of a pax understood with Steve Jobs that Tim has broken once he died. We, the devs share our value with Apple and Apple innovate the platform greatly bringing back more value to us or potential … but that is not really happening in the last 6 years or so. Precisely the opposite … iPad OS is dragging their feet in evolution with minor update every year, iOS same thing, Siri is dumber by the second and still mostly closed to devs and the cherry on top of that new products are coming out even more tightly closed, made mostly for Apple services not to empower devs but cutting them off … not to mention Apple building digital services rivaling devs services when it can, if not sherlocking some into the system. Get the Tim picture? IMHO Tim has broken developers trust and we can see that by the number of innovative apps coming out for iOS … social networks, photo filters and little else.

If you followed the OJ trial, he was the only one who could have committed murder, yet he was found innocent. Quoting song and verse means nothing unless, time and money is devoted to building a case and the case wins.

 

[Nuno Lopes]

@I7guy,

Don’t understand your comment. Apple was ordered to cut the exclusive In App Payment ties with the App Store and let Devs communicate other payment options. If it’s policies were found innocent this wouldn’t be the case.

Now you and other shareholders idea was for Apple to rise the licensing costs individually (API, SDKs etc) to such a level that the dev option of using a third party payment system or simply it’s own would be economically inviable … Well that would be against the court order as explained previously. The tie in such a strategy would still be in place, just being enforced in a different way. Would be very hard to believe that the App Store service in such as strategy is being given for free while the dev materials would cost 30% of the devs sales when in a previous month was argued quite the opposite … The APIs, SDKs etc where being supplied to $100 a year per dev while the App Store service was charging 30% of the sale for the service.

This is not a murder trial anyway. The subject is so different as was the result of the OJ trial.

Now your point was that Devs wanted to get it all for free. They did not get it so they did not win. That is nowhere close to the truth simply because devs don’t want it all for free … devs are creators of value and understand the price of materials as Apple does. Now you do in an exchange of a comparatively small investment compared with your share gains, while sitting in your couch typing away.

No one is trialing Apple from being a Monopoly or not. Being a Monopoly is not illegal in the US or the EU. So they can never be trialed for that.

You seam to move from one fabricated reality to the other. What’s the point?

PS: This was not ordered by the EU by the way, but by a judicial court in Apple hometown, go figure. Maybe Apple should leave the US?. Apple can very well not apply this to the EU region considering the EU ordered yet no such thing.