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Apple has been fined €1.8bn ($2bn) by the EU after an investigation found it had limited competition from music streaming services such as Spotify.
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The European competition commissioner, Margrethe Vestager, said a smaller fine would have been nothing more than the equivalent of a parking fine and the €1.8bn was designed to act as a deterrent against a repetition of such practices by Apple or others.
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“Apple’s rules ended up harming consumers. Critical information was withheld so that consumers could not effectively use or make informed choices. Some consumers may have paid more because they weren’t aware that they can pay less if they subscribed outside of the app,” Vestager said.
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Vestager said consumers may have paid two or three euros a month more for music streaming because of the lack of open competition. However, she conceded that the fine would not be distributed to customers who had been allegedly exploited but to individual member states.
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She said the fine represented 0.5% of Apple’s global turnover.
So the question really is, does the user base belong to Apple just because they bought an Apple product?
If it was a car, would it be reasonable for Ford to demand a revenue share just because someone manufactures “compatible” tyres?
How is Apple different that it deserves having an “ecosystem”?
Apple’s ecosystem isn’t unique, take Cosco or Sam’s Club for example. If you want access to their “user base” then you’ll need to follow their rules and accept that they’ll be taking a bigger cut than other markets. You can choose to sell elsewhere, but that’s the price for access to their customers.
And as for your Ford example, that’s hardly a crazy concept. Plenty of manufacturers have to pay a premium to manufacture parts for certain companies.
Yeah, but I imagine Costco or Sam’s Club don’t manufacture products that then can’t be used together with products made somewhere else, do they?
I’m not saying Apple is out of line because of charging for putting stuff in their app store, I’m saying Apple is out of line because they don’t let other people develop software compatible with their products and sell it without taking a cut.
It’s as if I was manufacturing trailers, and had to pay Ford a 30% cut just because it can be hitched to a Ford. Even John Deere isn’t as egregious, because while they are as bad with regard to repairing stuff, even they don’t want to take a cut of every hoe and plow that can be hitched on their stuff.
By the way, this is how you know Apple is monopolistic; in a competitive market standards and interoperability increase your revenue, since if there is competition, and they adhere to standards, you become a worse option and uncompetitive. Only monopolistic companies profit off of walled gardens. Competition kills them.
This is an entirely different argument about whether companies should be allowed to make their products proprietary and only work with stuff sold by them, which btw is also common outside of Apple.
This discussion is about whether or not Apple has the right to enforce certain rules and demand a bigger cut from those who want to use their market place, and as we’ve gone over plenty of other markets do this as well. Apple isn’t unique here.
Is Sony out of line because they won’t let you put your games on their marketplace and sell it without taking a cut? Nintendo? Microsoft?
Hell, even ignoring Costco and Sam’s Club, nearly any market you decide to sell your product in will be taking a cut, some more than others. This isn’t a new concept - if you want access to a company’s “user base” then you’re going to have to give the company a cut.
Not quite, as the ability to hitch your trailer to a car, luckily, isn’t proprietary and works the same across the board. If instead you wanted your trailers to make use of a proprietary feature of Ford’s then yes, you’d have to pay a premium. Whether that’s parody with their OS throughout the trailer, or some other feature that’s specifically theirs, you don’t get access to that for nothing.
A better analogy though, as we’re talking about markets, is if you wanted to sell your trailers on Ford’s car lots. Yes, you alone manufactured these trailers, but if you want to sell them on Ford’s lots, to their clients, then you’re going to have to pay a premium.
But you’re not talking about Apple here, you’re talking about the App Store. Apple itself isn’t a monopoly, as it quite literally has direct competitors. While the App Store is a “monopoly” in the same way that the PlayStation Store is a monopoly.
The problem is not that they ask money for advertising on their platform. The problem is that they banned “trailer sellers” from advertising their trailers as purchasable “outside of the car dealership”.
The main disagreement here I think is that the EU does not accept Apple as the owner of the iPhone app market. iPhone users don’t belong to Apple as customers beyond their device, and are free to buy iPhone-complementary products elsewhere.
And the point with this ruling, other companies are free to advertise that you can buy stuff elsewhere, which Apple didn’t let them before.
That’s what I’m saying, cars are a competitive market, because if your car has some “proprietary feature” that only lets some trailers be usable with it, the market will react to it as if your car could not tow trailers. While with the iPhone, it’s on the trailers to beg for compatibility. That’s the point with these rulings, in a healthy market, everyone having access to Apple’s interfaces would be good for Apple. For cars specifically, it’s usually the manufacturer who has to license the standard, not the other way around. And that holds true to most tech standards, like HDMI for example. Somehow phone OS APIs seem to be an exception. Wonder why that might be.
I didn’t say “Apple is a monopoly”, I’ve said Apple is behaving monopolistically, as in against the ideal of a competitive market. And the EU agrees, hence the fine. What you or I or Apple thinks does not really matter, what matters is what the EU thinks, because the European mobile app market belongs to the EU, and Apple is participating at the EU’s pleasure.