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EU Businesses Apple

EU Launches Antitrust Probes Into Apple's App Store and Apple Pay (cnbc.com) 44

Posted by msmash from the my-way-or-highway dept.
The European Commission announced Tuesday that it's launching two antitrust investigations into Apple's App Store rules and the Apple Pay platform. From a report: The Commission, the executive arm of the EU, said it will assess whether Apple's rules for app developers on the distribution of apps via the App Store breach EU competition rules. While companies can place their apps on the App Store at no cost, Apple charges companies 30% from in-app purchases and 30% on subscriptions for the first year, then 15% thereafter. Spotify, which competes directly with Apple Music, feels this is unfair and filed a formal complaint in March 2019. Kobo, an e-reader company that competes with Apple Books, has also filed a complaint. Executive Vice-President Margrethe Vestager, in charge of competition policy, said in a statement: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules."
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EU Launches Antitrust Probes Into Apple's App Store and Apple Pay More

EU Launches Antitrust Probes Into Apple's App Store and Apple Pay

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  • The most important point of the article is that the EU can "charge U.S. tech firms 10% of their annual revenues". While I get that there may be some legitimate competition related things to look at, the fact that they have "skin in the game" so to speak is concerning to me. That being said, there are some legitimate things that can be up for debate: Should app developers be charged at the rate they are for in-app purchases? It's steep, but of course if you really hate it, you don't have to make your app

    • Re:EU Tax Strategy or useful regulation? (Score:5, Interesting)

      by thegarbz ( 1787294 ) on Tuesday June 16, 2020 @03:51PM (#60190214)

      The most important point of the article is that the EU can "charge U.S. tech firms 10% of their annual revenues".

      Nope. The EU can charge businesses that do business in the EU and break EU law 10% of their annual revenue. Where a company comes from is irrelevant, as is any company obeying the law.

      I find it curious that it is "concerning to you" that laws have enforcement mechanisms and penalties. Are you of the belief that laws should only come with strongly worded letters which consist entirely of "Stop! ... Pretty please!"?

      • So many people don't get it.

        It doesn't matter if it means doing business in the EU, or India, or China, or the UAE, or the USA. If they choose to do business there they must follow the law there. If China says to filter content, filter inside China or get out of the nation. If UAE says references to alcohol and bikini clad women must be removed from marketing material, either comply or leave. And if a company wants to do business in the EU, they can comply with the laws (including penalties for violations)

  • Just wait... (Score:3)

    by SuperKendall ( 25149 ) on Tuesday June 16, 2020 @12:29PM (#60189452)

    I wonder what the EU will make of the things Apple is doing with the Apple card...

    As for this issue, since Apple makes the devices I don't see why they can't dictate rules of what can run on it. It's not like Apple is a monopoly, anyone is free to go buy an Android device.

    What the EU is trying to do here, is the same as dictating stores carry a certain product, or cap how much they can charge for something that takes up shelf space.

    If I were Apple, I would simple disable all apps on all iOS devices period, with a big message when you tried to load saying the EU had forbidden them, and giving the number of the EU to call and complain...

    • Re: (Score:1)

      by Anonymous Coward
      How is buying an android device a solution? The problem isn't the device, it's from where you can get software for it, and to whom goes payment. I shouldn't have to be limited in where I can get software, nor as a developer should I have to pay Apple to host it for me.

      What the EU is trying to do here, is the same as dictating stores carry a certain product, or cap how much they can charge for something that takes up shelf space.

      How did you arrive at this conclusion?
      Your statements seem to show an anti-apple bias. While you're certainly entitled to that position, positing it as fact to form a basis for your conclusions is incorrect.

      • The problem is that antitrust laws should be focused on protecting consumers not corporations and in this case they are being used for the latter and not the former.

        These services would be perfectly able to say push their registration and payment processing to web sites and then make the apps free and require a login that has been previously registered on the web. Then they wouldn't have to pay Apple one cent. They want to have their cake and eat it too.

    • Re: (Score:2, Insightful)

      by thereddaikon ( 5795246 )

      As for this issue, since Apple makes the devices I don't see why they can't dictate rules of what can run on it. It's not like Apple is a monopoly, anyone is free to go buy an Android device.

      Well once they sell it to me its no longer their device. Its mine. Why should they be allowed to dictate what I cant and cant do with it? Its none of their business.

      • Well once they sell it to me its no longer their device. Its mine. Why should they be allowed to dictate what I cant and cant do with it? Its none of their business.

        The argument isn't about what you can put on your phone. The argument is about what they will put in their app store.

        As long as the phone is locked down sufficiently to prevent side-loading, then yes that's a semantic argument. But that's enough for a legal defense.

    • I think there's an argument to be made that there's a duopoly at this point. You can choose Apple or Android, but beyond that you don't have much of a choice (Blackberry maybe?). From what I understand Google takes a similar cut, so I would think they'd go after Google for this too.

    • I wonder what the EU will make of the things Apple is doing with the Apple card...

      As for this issue, since Apple makes the devices I don't see why they can't dictate rules of what can run on it. It's not like Apple is a monopoly, anyone is free to go buy an Android device.

      What the EU is trying to do here, is the same as dictating stores carry a certain product, or cap how much they can charge for something that takes up shelf space.

      Year after year Apple's users who represent 12% of the smart phone market share generate roughly twice as much revenues in app sales as Android users do on the Google Play store even though Google Android commands a 87% smart phone market share. This means that for the same effort, anybody wanting to make money off of Android can be making twice the money selling to Apple users. Just because these companies went to the EU commission to, whine, piss and moan over having to pay to play and to feel entitled to

    • I wonder what the EU will make of the things Apple is doing with the Apple card...

      Probably very little unless you can point to a specific anti-trust issue.

      It's not like Apple is a monopoly

      You don't need to be or have a monopoly in order to abuse market power. Monopoly status doesn't come into the laws at all.

      What the EU is trying to do here, is the same as dictating stores carry a certain product

      Nope. The EU doesn't care what stores carry what products. They only care about whose products are being carried and that parties are being charged equally in a way that doesn't give special privileges to those with more market power.

    • It's not like Apple is a monopoly, anyone is free to go buy an Android device.

      It's not like it's that simple though. Switching from Apple to Android requires finding replacement apps, and in many cases, paying again.

    • As for this issue, since Apple makes the devices I don't see why they can't dictate rules of what can run on it.
      Sure, and what is next? You buy a car and the manufacture tells you to only get gasoline from a certain brand?
      And you you only my buy food from shop X?
      And only pay food with credit card Z?

      Are you a complete moron?

      It is _my device_ I DeCIDe WHAT IS RUNNING ON IT!

      If I were Apple, I would simple disable all apps on all iOS devices period, with a big message when you tried to load saying the EU had f

  • Europe can compete with the United States in a lot of things. Cars, Luxury Items... With the VW, Siemens, Philips, BNP Paribas, BASF.... There are a lot of big companies that can be head to head with American companies. However in terms of Software Services what companies in Europe that can compete against Microsoft, Apple, Google, Facebook, Amazon... There are a lot of good programmers and business people in Europe, however they seem to avoid that sector.
     

    • No other country is competing with Microsoft (Windows). That's not a uniquely European problem. Microsoft had a huge head start in the GUI Operating Systems market and actually used anticompetitive practices to maintain this position.

      You are talking about Software Services and Apple. Apple got big because it is a smartphone maker, and I think one of the reasons European companies are not developing these is the patent thicket: https://www.wipo.int/wipo_maga... [wipo.int] - only the big US companies and some in Asia

      • Apple got big because it is a smartphone maker, and I think one of the reasons European companies are not developing these is the patent thicket: https://www.wipo.int/wipo_maga [wipo.int]... [wipo.int] - only the big US companies and some in Asia (where patent protection is not as strict).

        They had Nokia, but Microsoft bought the company and dismantled it—a perfect example of them steamrolling the competition and not even getting anything out of it. When Microsoft gets involved, the market is usually worse off. Nokia totally got Homer Simpsoned. [youtube.com]

      • Apple got big because it is a smartphone maker

        Did it? I thought they got big because they bought a Finnish facial recognition company for their security tech, an Italian audio design company, a Swedish mapping company, a Swiss motion analysis company, a French computer vision company, a Danish image processing company, a German manufacturer of mobile power management hardware, and a mapping provider partnered with a Dutch mapping company. :-)

        But admittedly not that much as Amazon.

        I don't see this as a bad thing. Nothing good can come from having a company the size of Amazon control the supp

    • Not sure what you're talking about. Europe has plenty of software services, you just don't hear about them because we prevent them from growing to monopoly sizes.

      Heard about Adyen (Dutch)? I'm sure you know about Paypal, but did you know that Paypal isn't ebay's payment processor anymore, but rather they adopted a European service instead?
      You may have heard of some small companies like SAP (German), or Sage (English) which both provide enterprise services and have revenues either side of OneRichArseholeCall

    • Re: (Score:3)

      by Misagon ( 1135 )

      You could say that Microsoft, Apple, Google, Facebook and Amazon are not really US companies any more.

      You could say that they are multinational corporations, just seated in the US.

      They have offices everywhere. Research and development is done where there are engineers. Operations where laws are permitting.
      Datacentres are located where there are users, good network infrastructure, and where power and cooling is affordable.

      The big corporations tend to swallow promising startups before they make much of a name

    • Re:Why cant Europe compete on Software Services (Score:4, Insightful)

      by AmiMoJo ( 196126 ) on Tuesday June 16, 2020 @02:22PM (#60189860) Homepage Journal

      We can compete. It's just that a lot of our services are in non-English languages so you don't know about them and their scope is a bit more limited.

      The same is true in other parts of the world. WeChat, QQ, Line... All massive, all barely known in the West.

    • Most of the companies that Europe competes with are national champions and they can compete for that reason. Companies like airbus and boeing, VW and GM, etc are all heavily backed by national governments because they employ too many people are so are "too big to fail". These European companies compete because their governments won't let them fail.

      The tech industry however is much too fast and dynamic for the government to get a handle on it. So they haven't been very successful in their attempts to instal

      • VW is not backed by a national government.

        So they haven't been very successful in their attempts to install a local champion.
        We have many local champions, you just don't know them. Web.de or Free.fr come to mind.

  • “Artificial” barriers (Score:3, Interesting)

    by aaarrrgggh ( 9205 ) on Tuesday June 16, 2020 @12:53PM (#60189510)

    In my book, Apple has costs associated with managing purchases, it provides consumers a benefit, and the real question just comes down to how much is a reasonable fee for the service. For me, I have a significant preference for using Apple Pay in a transaction compared to manually entering card data— it also lowers my threshold for completing a purchase.

    So, for me, the barriers are really synergistic. Now, if your business model is based on a high-priced subscription purchase (anything over ~$15/month), that system doesn’t work well. So, pull a Netflix and save yourself 10-20% of revenue. Like Netflix, I might decide not to renew though.

    • Re: (Score:2, Informative)

      by Anubis IV ( 1279820 )

      The issue here is a nuanced one. It's fine for Apple to take a cut of content that they host or deliver (i.e. the retailer's cut). It's fine for Apple to take a cut as a payment gateway. It is NOT fine for Apple to use its position as owner of the retail platform to prohibit the use of competing payment gateways. That sort of dictum is nearly a textbook example of anticompetitive behavior.

      There are zero technical barriers preventing developers from using third-party gateways today, but you're right that the

  • What is the complaint actually (Score:3)

    by ThosLives ( 686517 ) on Tuesday June 16, 2020 @01:18PM (#60189596) Journal

    What's the complaint? Is it essentially that they want to use Apple's infrastructure for managing in-app purchases or subscriptions but don't want to pay Apple's rate for that?

    I thought there were many ways that companies could get revenue without using Apple's infrastructure - companies are not required to use Apple's infrastructure are they?

    Or is the complaint that even though there are other alternatives, they aren't as popular, and they don't get as many sales on those platforms so they don't get as much revenue even though they get a higher percentage?

    • One complaint is devs can't put in a banner or text in the app telling the user to sign up on the web.

    • Re: (Score:2)

      by beuges ( 613130 )

      I think you misunderstand the problem. If you build an iApp, you absolutely cannot accept payment for purely software-based purchases (e.g. unlocking a level in a game, or upgrading from the free to Pro version of an app) unless that payment is an App Store in-app purchase. You may have access to a 3rd party payment gateway which you'd prefer to use, but Apple will not allow you to make what it deems to be an in-app purchase via any outside means.

      Take the argument that Hey.com's founders have just made: The

      • Ok thanks - I was under the impression that app developers were in general allowed to use external payments, just not "advertise" them in their app - for instance Netflix, etc.

        I did not realize it was more restrictive (and, based on other articles recently, so arbitrary).

        I do agree that software licensing - and patent licensing for that matter - that are percentage based should go away entirely. Licenses should not be based on a percentage of total price, they should be a fixed nominal amount. When I buil

  • The 30% doesn't cover currency exchange etc. I normally get about 65% of the net income (i.e. after sales tax or VAT). Sure, currency conversions are not free, but since I don't have a choice (I would gladly let them deposit USD in my USD account, Euro in my Euro account etc), I don't see why I should get that extra 5% deducted, which is not trivial (my own banks give me much better rates).
    I mean they claim they get just that 30% and then all overhead is theirs. Except some unspecified stuff to do with fina

  • What is late capitalism? It has a nebulous definition yet people can't seem to recognize it when it is staring them in the face.
    A feature of late capitalism is a few trillion dollar companies dominating a market, or many markets, yet not obviously doing anything illegal.
    Well this should be illegal: controlling the rules/fees/visibility of a platform while competing in it.
    Similar problem with Amazon&third-party sellers and essentially what old-Slashdot hated about Microsoft; abusing their control

  • I'm fine with Apple exerting quite a bit of control over their ecosystem and I actually appreciate the benefits of the walled garden approach (note: I'm NOT claiming superiority; being a walled garden comes with drawbacks too, obviously), having happily been using iPhones ever since the 3G, but it makes no sense that Apple is allowed to use its control over the App Store to dictate who developers use as their payment gateway, given that Apple payments are a completely unrelated system. This is the exact same sort of bad behavior that Microsoft engaged in with IE back in the '90s, where they used their dominance in one area to exert undue influence in another, except it's even more extreme because Apple is wholly disallowing alternatives.

    Mind you, this isn't a case of people demanding that Apple add a feature. Apple doesn't need to add anything. The ability to support third-party payments is already there and developers would be using it today if not for the fact that Apple is mendaciously requiring that payments go through them.

    Now, to be fair, there are some valid security and UX concerns, chief among them being that it's dangerous to normalize the practice of leaving the app to provide credit card details. As things are today, iPhone users have been trained by over a decade of experience to expect a standard pop-over for any up-front or in-app payments, so if they were suddenly redirected to a web page and asked to fill in credit card details, many of them would balk. Relatedly, it'd increase the likelihood that our details would be compromised if we were providing them separately to every app's website, not to mention it being a far worse experience if we need to re-enter our payment details all the time, rather than being able to reuse our existing ones. If those concerns are ones that Apple shares, however, it wouldn't be hard for them to provide an API that third-party payment gateways could hook into, allowing users to stay in the app and see the same pop-over they're used to seeing, while giving Apple a way to log those payments in case anything should occur.

    I'm fine with Apple taking a 30% retailer's cut for the up-front purchase. I'm fine with Apple charging a fee on in-app purchases for content they host and deliver, even if they aren't the payment gateway. I'm fine with Apple setting their own fees for anyone who chooses to use them as a payment gateway. But this practice of denying developers the opportunity to use alternative payment gateways for in-app purchases in their apps is anti-competitive and needs to stop, or, if nothing else, they must allow developers to redirect users elsewhere.

    Apple cannot use the lack of native support for third-party gateways as an excuse to restrict competition.

    As for the eBooks thing, the issue here is the same as the others: that Kobo is being forced to use Apple payments. If we set that issue aside, then so long as the App Store doesn't have a monopoly, which it doesn't, Kobo has a choice in the matter and all is well. If they don't like the terms of Apple's platform, they are welcome to switch to another or build their own. Kobo doesn't get to cry just because Apple went to the effort of making their own platform and thus stands to reap additional benefits.

    But again, none of that matters until the payments issue is resolved, which it needs to be. It's about time that Apple is being taken to task for it.

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