Dutch antitrust authority fines Apple for fifth time
fosspatents.com
fosspatents.com
Cry me a river. Letting people control how they're tracked isn't "tyranny".
> I think Apple's conduct following the ACM decision is above board. Sort of hardball, but not out of line--and not entirely without merit.
Really? "Sort of" hardball? Apple's absolutely giving the finger to Dutch authorities. They're not even complying with the letter of the ruling, let alone its intent. C'mon.
The Dutch ACM is now trying to make its ruling apply extraterritorially by rejecting Apple’s solution of allowing a Netherlands-specific app.
Requiring multiple completely separate apps for different payment methods is insane - the reasonable way is to have the same app support both and show the non-Apple method only for Dutch customers.
I didn't read anywhere where the ACM suggests an extra-territorial solution, only that it was not adequate. Perhaps lowering that 27% fee could be the ticket, since it Apple's last action appears obstinate/playing number games.
That's one example, but there are numerous others, some worse and some harmless. Either way, it's a problem for everyone. What laws do you follow, which laws are enforced, how many laws are being broken by a developer that is just trying to publish a fun app.
There are ways for a government to project their laws on another nation, but Nationality Principle is not one of them. An example of one country projecting laws onto other countries are the US Anti-Money Laundering laws that the US doesn't even follow but they demand every foreign government that uses USD to follow.
The developers are in the US. They don't have to follow local laws anywhere else. This is a fundamental principle of international relations dating back to the Treaty of Westphalia in 1648. This international order is a major reason why we can have nice things, like peace, instead of unending war.
It is, of course, possible for the nation to ban these entities from conducting business in their jurisdiction. If such entities preferred to stay out of Europe and lose that business, it would be further possible for the nation to ban its citizens from accessing Facebook and similar businesses via the Internet; the general pursuit of liability consequences which Europe has attached to the GDPR has produced a sort of soft-ban, as any European who has seen a notice from a US newspaper can attest. This is of course quite ugly, but typical GDPR-boosters sometimes seem to think that anyone who doesn't kowtow to the European order is fundamentally Evil and would like to distract you with this fact, while they seek stronger ways to protect their citizens from treacherous foreign newspapers.
We are able to maintain a stable global system with international trade in no small part because most jurisdictions don't try to do the same, legislating what foreign actors may and may not do in their own countries as a condition of their business. This system is eroding — the GDPR didn't actually start it, the US did — and it is likely to have many unfortunate consequences in years to come. Among other things, Europe is of the opinion that GDPR and its fines must be enforced in future trade agreements, but it is fundamentally incompatible with the US Constitution and its first amendment (the "Right to be Forgotten" in particular).
Westphalian sovereignty has been a myth for centuries. It is incompatible with international trade. It is incompatible with Nuremberg. And it’s internally inconsistent, giving no guidance as to which historical borders are the correct ones nor what counts as domestic versus international concern. (Spoiler: anyone can find some point in time when they had legitimate claim to almost anything, and anyone can deem almost anything domestic or international.)
None of the Treaties’ signatory states exist today. None of them were democracies. Citing it is akin to bringing up the elements of fire and earth in a physics lecture.
This is the world we built together, where we can cause harm to anyone across the world without leaving home.
This is literally nonsense. All countries do this, and have done for the entire modern era.
In one day - not at all.
Over the longer term? If it makes shopify unable to function and shopify collapses, or if shopify loses many of its shops (due to worse terms) - then you get less choice in the market place. Those shops don’t necessarily open elsewhere, vendors stop selling and go back to whatever they did before.
On the topic of the article: good. Apple was clearly taking the piss by charging 27% for not processing payments, immediately after being told by a legal authority that a 30% cut on in app payments was anticompetitive.
You’re coming up with stuff. This was never about the apple tax.
I've been one of those devs once. It wasn't nearly as high stakes though.
That's "sofa-cushion money" for Apple. I have a feeling that they'll just pay it, and carry on as usual.
If we round up that's 7 million iPhones, might be some more tablets but I'd guess negligible. A max of 50 million euros in fines will definitely be a substantial amount of their App Store income.
Surely that would be a factor of 50.
(So its always been possible to have a midwestern or Florida experience even in LA county, which has been widely reported as having strict requirements, but its not really anybody's day to day experience)
Otherwise, if I were EvilCorp Inc, then I would just keep doing my thing and paying the Dutch government their "tax".
I suspect that Apple would not let that happen, and would probably be willing to shut down the Dutch store, if need be.
It would be a different matter, if it were China. I think that Apple may have caved, there.
Perhaps we should have a three-strikes policy. After the first strike, your company logo gets one bite taken out of it. Second strike, one more bite. Third strike, your logo is gone.
For whatever faults they might have, the regulations are intended to protect consumers, not harm them with a scorched earth plan out of a libertarian fantasy.
There are plenty of ways you can punish a company for wrongdoing without risking the consumer as much as that idea would.
>:)
That would be much more effective that piddle farts of some money fines.
As far as it goes for Apple, I wonder if they’d be willing to go a year without operating in the country. See how it pans out. It wouldn’t be tolerated by stockholders for China or India, but The Netherlands?
And also think what would happen if this ruling happened in the USA.
Even if the Dutch revenue isn't that much, once one country succeeds the rest will follow that model. Apple and Google are just going to delay as much as possible, and when their delay tactics no longer work, eat the fines until they're higher than the profits.
This is a nice article [1] about what the ACM is asking for and why Apple is making an effort to comply.
Also, this lawsuit is for dating apps specifically, but should pave the way for other categories to follow right?
[1] https://www.theverge.com/2022/2/14/22917514/apple-netherland...
The point of contention here isn’t about the Netherlands, but about whether the Dutch ruling will apply de facto globally. Apple wants to ensure it doesn’t, by requiring Netherlands-specific apps if enabling third party payment processors. The ACM wants it to apply globally.
The issue here is Apple is trying to frustrate any attempts to circumvent their payment processing: By both still demanding 27% fees, and also requiring they publish a separate app (likely requiring users to uninstall the main app and install the new one), Apple is trying to make it so onerous and painful to use third party payments that nobody will actually do so in practice.
In the court case that led to this, the court required Apple to support third party payment processors, but rejected the claim that their 30% cut was outrageous.
The EU also has regulations limiting how much payment services such as Mastercard can charge. https://ec.europa.eu/commission/presscorner/detail/en/IP_13_...: “caps are set at 0.2% of the value of the transaction for debit cards and 0.3% for credit cards“
Given that, I don’t see how the same court could say a 3% margin for third party payment services is unfair.
Requiring a new app, on the other hand, is the trouble area. It means losing App Store reviews, and, probably more importantly, means users can’t seamlessly upgrade to a version that supports a third party payment service.
Also, if you retire the old app, you likely will lose subscribers. If you keep it around, you’ll likely see few users move to the new app.
I think the apps here would be front ends to the same dating network.
That calls for making it as easy as possible to migrate. Downloading a new app and deleting the old one is harder for users than using the iOS auto-update mechanism, so developers would prefer to have the ability to update their app with one that offers a subscription through a new payment service.
Developers can force users of the old app by retiring it, but they can’t force them to download the new one. Chances are some users will think “what do I get out of this app?” and not download the new one. That’s the “losing subscribers” part.
Because of that, I can see why Apple isn’t giving up the golden goose at the moment.
This. Most users won’t bother, so they’ll default to using Apple as a payment processor. Everyone knows the power of defaults.
But doing this now, while this case is ongoing, will very quickly earn them a contempt of court badge,
Trivial amounts like this are irrelevant to a company as large as Apple. They are just a cost of doing business.
Source article (in Dutch): https://blog.iusmentis.com/2022/02/18/wat-kan-de-acm-doen-da...
It would probably do the prosecutors good to take inspiration from the old chessboard legend and fine them 2x the last fine for each repeated case.
Best is to just drop fines as penalties and change them to something that companies will actually pay attention to.
does this mean it could read 50 million per week, or 50 million in total. I would assume per week, as in total does not seem reasonable, but the wording is ambiguous.
The sanctions can at most be 10% of (dutch) revenue. However, that can double to 20% if Apple re-offends within 5 years.
And apparently just paying the fines without any attempt to fix the problem for which you're fined can be considered "Contempt of court", which allows a judge to impose further penalties of increasing severity (not just fines), at least according to this blog post by a dutch lawyer: https://blog.iusmentis.com/2022/02/18/wat-kan-de-acm-doen-da...
There are other ways in Dutch law to threaten firms with larger amounts but not all of those are open to the antitrust authority. A judge could threaten penalties that can escalate quickly when a company remains non complaint and even persons (in this case: directors) can be taken hostage for not complying. (Obviously, that is a last resort measure and not often used.) Dutch source [1]
[1] https://blog.iusmentis.com/2022/02/18/wat-kan-de-acm-doen-da...
"In an earlier case [1] the judge blew a gasket when IBM refused to honour a wrongful dismissal verdict, and kept paying the imposed damages but refused to re-hire the employee: the damages were subsequently raised from €50k to €5 million. If the employee still would not have been returned to his job, the fine could have been raised even more, as there is no legal limit to imposed liquidated damages, as long as the fines are proportional to the case. And what is considered proportional can easily grow to very large sums when you repeatedly ignore a court order"
[1] that case had a very nice summary title: paying damages does not equate to adhering to the verdict; contempt of court
For this to not be a loss, every inhabitant (baby and grandma) would have to spend an average of 33 euros (33×17M×0.3×0.3=50M) on dating apps. For "nobody to notice" at Apple, multiply 33 euros by a factor of your fancy.
[1] edit: guess was correct https://www.statista.com/statistics/744305/market-share-of-l...
Apple better hope it has no business at all in that country. Or possibly even the EU, actually, if there are treaties/EU laws that allow cross country enforcement.
They pull the same stunts in all countries and courts in a neighbouring legislation (e.g. Germany / France) could very likely impose similar fines.
The Dutch are just the first.
There are several EU wide directives in the cooker which aim to address such problems (DMA and DSA).
Apple probably sees the writing on the wall and tries to extract as much money while they can
Tinder (child of Match.com, one of the parties in the coalition against Apple) charges certain demographics (males) higher for the same services and have other underhanded tactics to nickle-and-dime users, like charging for read-receipts!
Features like visibility boosts are a gamble and they may very well do nothing at all some times.
The beauty of Apple’s in-app purchase system is that if a user feels gypped by an app they can request a refund, and most of the time Apple will grant it without question, so it’s no wonder that companies with predatory business models would be the loudest voice for circumventing user protections.
No matter how you feel about Apple, there are worse wolves in the woods. Let’s not empower the likes of Tinder/Match. They are not the betrodden underdog in any shape or form.
If Tinder/Match break the consumer protection laws on how they process payments, they should be investigated and prosecuted accordingly.
I wish there is some sort of Dutch polling group to send out public survey asking the Dutch people:
Apple is the biggest and perhaps the best company in the world, however the Dutch court disagrees with how Apple are charging Dutch business 30% on Apps and Services and given no other choice of payment processor. Should the Dutch Court continue its ruling and authority, Apple may threaten to leave the Netherland which leaves iPhone user with no support and no future Apple product in Netherland.
Netherland is only a small country with 17M population. Even if every single population owns an iPhone it account to less than 1.7% of total iPhone users. A rounding error for the biggest company in the world. Should the Dutch Court continue its proceeding it may ultimately have a negative effect on Dutch citizens. Along with Dutch business without access to Apple's iPhone App Store market.
Should the Dutch court drop the case against Apple? Yes or No.
You can probably see Apple's actions as attempting to hold their position best they can to try and drag that action back a little bit, but I think it's going to backfire badly.
BTW, the Netherlands has significant power over FAANG/etc, as the majority of American corporations and unicorns are all registered in NL for global tax evasion purposes. What irony!
De jure or de facto?
That's because the Chinese would shut their market to Apple if they would misbehave.
Dutch (and EU) consumers have traditionally been well protected by consumer laws to prevent situations like this. It is part of the culture to have this freedom, or freedom im general.
Threatening to abandon any country, because they are big and it is small is only going to agitate the population.
On the past years the feeling in the EU is that Big Tech is abusing its power, financially by bypassing taxes, by its market domination, and also by disregarding privacy. The EU has taken steps to prevent this through legislation (for example GDPR), yet this is mostly being disregarded. Now that the bureaucracy has caught up, you will start to see more and more cases and fines.
You want to serve a wealthy, tech loving country like The Netherlands, you better abide by their rules.
What happens next?
I'll also make explicit what I thought was implicitly implied in my first comment, what do people think should happen next in these situations?
Laws exist because we, as a society, decided that we want to live by a certain set of rules. If the rules are not upheld, law becomes less useful.
Some actors in our society follow the law because they see it is the right thing to do. A lot of actors are willing to make exceptions for this thing or that thing (e.g. speeding). Some actors don't give a damn what the law says, they're only motivated by the possibility of being caught and the subsequent punishment. And lastly, there are actors who just do what they want, punishment be damned.
I would argue that corporations generally fall into the third category. They weigh the likelihood of being caught against the punishment (fine) they will receive.
Regarding punishments, I think they generally ought to be the lightest possible punishment that forces compliance. Two things follow from that. One, that a punishment must be tailored to the infringer. If the infringer has a lot of money, the fines need to match. Two, that means subsequent punishments for the same infraction _necessarily_ must be harsher. The lesser punishment didn't work last time, so it must be increased.
All of this to say that Apple's fine for this should be absolutely staggering.
Apple could ignore staggering fines and simply not do business in countries that issue such fines. But you can only do that a few times before it starts to catch up with you.
Laws exist because someone can enforce it on someone else. That's it. Case in point, Prohibition.
You can sprinkle the platitudes of society and culture, but neither should be the basis for whether a law is valid.
>Regarding punishments, I think they generally ought to be the lightest possible punishment that forces compliance. Two things follow from that. One, that a punishment must be tailored to the infringer. If the infringer has a lot of money, the fines need to match. Two, that means subsequent punishments for the same infraction _necessarily_ must be harsher. The lesser punishment didn't work last time, so it must be increased.
One should also question as to whether the law in place is justifiable. The Dutch court is compelling a business relationship that didn't previously exist. In doing so, it is forcing Apple to take on a cost/responsibility that it never agreed to in the first place. Enforcing an invented obligation is not a just cause to fine a company or anybody for that matter.
> What actually is happening next? As far as I've seen, not a whole lot?
You’re effectively asking for the future of an ongoing case. Have you ever had a real answer on what _actually_ happened next in a court case ?
If so could you also give me what’s the actual final outcome of the Epic vs Apple trial ? I’d love to know.
For most people, they're better off using the HOV lanes illegally as the expected cost is effectively $0.
EDIT TO ADD: I commute with my kids, so I use the HOV legally. My reverse commute with against rush-hour, so there is no incentive for me to use them solo.
The Dutch always try to avoid making big deals out of anything that does not need to. This starts with the police being extremely well trained, but actively not engaging in anything until it is really needed and just keeping an eye on everything - one mentionable experience was a mentally unwell homeless man in Amsterdam who posed a very obvious threat to public safety by being violent and aggressive towards pedestrians - they showed up before I even realized they were needed, but then just took that guy (who was preparing to assault a random man walking by) to the side, and then had a 20 minute conversation with him, figured out what the reason for his anger was and then left again. The guy just sat down and looked at the ground until his tram arrived… that was already quite weird to see but if it works out I thought..
The next memorable experience being the time where I actually completely forgot to file my annual tax statement and, to make matters worse, completely forgot to declare a not small sum of money. I then paid what I thought I owned (3 weeks too late, not one word about it just a nicely worded acknowledgement mail once I did..), left the country for a few months and then returned to find some reminders from them with the very polite note to have a look and check if that is really correct - mind you… in my home country the IRS equivalent would have their best men on me at that point - I did check and got some serious anxiety once I saw that I really did not declare it and it actually looked 100% like I was trying to hide the income on purpose..
Guess what they said when I called them with my eyes tearing up and me imagining how much lube I need for this to not hurt.. “First of all, please calm down Mr., your Dutch is very good by the way! Let’s see.. that will be 3% on the amount due, plus 65€ fee for also submitting the report too late. But guess what, it looks like we forgot to calculate all that stuff you submitted for using your apartment to work, so we actually owe you 3k! You'll get it soon, and for next time try to submit your report on time, you don’t want to pay 65€ every year now do you hahahaha”
The stories just goes on like the time where they caught me technically importing hard drugs on the plane (amphetamines without prescription on my person) and just let me go laughing about it.. or that time where I had to defend my girlfriend from some asshole and I think I broke his nose and they just came (like 20 seconds later), had a look, the other guy just stumbled around, they asked him in Dutch if he thinks he did something wrong, him saying yes sir and them literally saying “I think your parents raised you better than that, no?“ That guy looked like he was about to start crying and that was the end of that story. He apologized to me and my girlfriend on his own accord, told me that I had an insane punch and I told him that I wouldn’t have punched that hard it he wasn’t as attractive and big of a danger to my masculinity and we had a good laugh and went our ways.
This just keeps going on and on, nowadays I live in a less „active“ area in Rotterdam right by the harbor but the Dutch mentality is omnipresent in anything and it really makes life so much more enjoyable.
And guess what, you can be absolutely fucking sure I make it a point to file and pay my taxes on time, not because it costs 65€ every year but because the symbolic value behind it is so much bigger.. I was awarded a level of respect and humanness and the thought of having to talk to that nice Dutch lady again and her being disappointed for me to have to pay the 65€ again is just not nice. It sounds completely crazy but if you are being treated this way (even if not always) there is no anger or the need to oppose the government any more. You are one of their people, you want to act as such by yourself too.
Now that leads me to the point I was actually trying to make, sorry for the ramble, this mentality, obviously, starts to completely and utterly fail when there are businesses like Apple involved that do not have any sense of personal responsibility. The symbolic fines will prove completely useless and are laughed at, but the Dutch will refuse deviating from this strategy. They would rather try this 5 times after another, and then a sixth time, because the whole country does only exist today because at some point everybody had to give up their ego and start working together as a country in order to deal with the water - which as far as I know produced sayings like „We are all in the same boat“.
Really, I would argue that companies like Apple do not have sufficient moral values to operate in that kind of responsibility, but the Dutch will uphold theirs anyway, and if it needs to be this will go on just like this for a very long time until someone is burdened with the task of thinking about real consequences, and even then it will probably not what Apple would deserve, just the bare minimum to get them to at least comply with this stupid shit. Another thing seemingly completely incomprehensible to this society, that you would make that kind of a big deal about in the end idiotically small issues as present here.
On another note, I have since moved to a less active part of the country, but the surprises don’t stop, they just change. Last weekend there was Storm Eunice, 100+mph.. I think classified as Hurricane, the Dutch do not see this is any kind of special event it seems, or at most as unusual.. I was sitting in the house, truly scared, I looked outside and there were still people going for walks and riding their bicycles (although with great problems). I opened the apartment door and it fucking shot open and slammed so hard against the wall behind it that the paint layer sprung off, to which a passerby reminded me to be careful as there was a storm right now…
Last story since this happened today again. A few days after I moved into this apartment, I got woken up by a very loud and heavy continuous sound. I got up, went into the kitchen and outside to the terrace, the sound now being deafeningly loud. I looked up and almost shit my pants. Maybe 300ft above my head, if not less, there was.. a fucking APACHE ATTACK HELICOPTER hovering above the house. A real life fucking Apache. In a relatively peaceful residential area. I couldn’t believe it. There were neighbors outside as well, they did not seem to notice. I said Hi and asked what’s going on? They did not seem to realize what I was on about either and I pointed at the god damn attack helicopter above their heads. They looked at it for a second, and then replied
„So what? Is this not compatible with your view of the Netherlands?“
Now try to find a reply to that.
The Apache is still.. simply around sometimes like today, and I still cannot comprehend the mindset required for god damn attack helicopters sitting above a residential area to be not even noteworthy any more, but that's how it is. Nothing else to mention. There is simply an Apache attack helicopter, sometimes also a pair of Ospreys or F15s flying very low above this residential area and doing whatever they do. That's just how it is. I got the Apache pilot to wave back once, I guess that was pretty cool but that is just how it is.
And now if you consider that almost the whole country is actually several dozen feet under sea level and the only reason it exists as it does.. is because there is a huge network of pumps continuously pumping out the water, day in and day out, and if it was not for these pumps a big percentage of this country would be deep under water, and noone even mentions it or thinks about it because thats just how it is.
If you just let this be for a second and try to not go crazy over the insane, absolutely batshit crazy level of mind required to decide this is worth it, you will start to see why the Dutch are where they are and why this issue and Apple itself are being so stupid it is not compatible with this society…
Because at the level of lack of morality and sense of responsibility that Apple operates at the Dutch would not have survived.
Please, Apple, just fucking do this stupid shit, you don’t deserve the treatment you get.
> As a general rule, the Regulation will cap interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards. For consumer debit cards, it also gives flexibility to Member States to define lower percentage caps and impose maximum fee amounts.
So, if anything, Apple is giving a 10x discount for the alternative payment processor. Somehow the Dutch authorities seem to want payment processing to be worth .3% of transactions, unless you're Apple, in which case they want them to be worth 100x as much, and at the same time the platform/SDK licensing Apple provides to be defined as worthless.
[1] https://ec.europa.eu/commission/presscorner/detail/hr/IP_15_...
There's still the apple developer fee.
Also, the value of the platform is itself increased by the apps made for it. Without third party apps, iOS devices would be less appealing to consumers.
I understand this argument, however let's not forget that it's a two way street. People were buying iPhones by the millions well before a single app was sold on the platform, and there are other platforms that the third party apps could publish on. They choose to publish on iOS because, for vast numbers of developers, it is a very profitable platform for them to transact on.