Apple was yesterday fined €500M ($570M) by the EU for its App Store policies. Apple has now responded, stating that it is being unfairly targeted, with the White House also weighing in to describe fines levied against Apple and Meta as “extortion.”
Despite the war of words, however, it seems to me that there are signs of a softening position on both sides of the antitrust dispute …
The EU fine
EU law requires free and fair competition. Large companies are not allowed to use their size and financial resources to put artificial barriers in the way of smaller businesses seeking to compete with them.
Apple was deemed to be breaking the law in two ways. First, it forced developers to sell their apps and in-app purchases only through the App Store, with Apple taking a 15% or 30% cut. It didn’t allow a developer to point to their own website as a place to buy a subscription, for example.
Second, Apple didn’t permit iPhone apps to be sold anywhere else. Nobody else was allowed to open a competing app store.
Apple made changes to both policies, though anyone wanting to sell an app via a third-party app store had to pay Apple a Core Technology Fee for the privilege of doing so. While very small (€0.50 per install per year), that could still prove very problematic for free apps, especially those created by indie developers.
Apple says the fine is unfair
Apple has responded, in a statement sent to Reuters.
Today’s announcements are yet another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free.
White House calls it extortion
Meta was also fined. Its offence was charging EU users a subscription fee for Facebook if they wanted to opt out of personalized ads.
Reuters reports that the White House strongly objected to both fines.
“This novel form of economic extortion will not be tolerated by the United States,” a White House spokesperson said.
9to5Mac’s Take
While the two sides may be arguing about the fairness of the fine, what’s notable is the size of it. $570M is a large sum of money in most contexts, but given that EU law allows it to fine companies up to 10% of their worldwide revenue, it’s actually a pretty tiny fine in the scheme of things. In my view, this is a conciliatory sign on the part of the EU.
It’s also notable that while Apple has voiced its objections, it hasn’t actually announced a decision to challenge the fine in court. That too may signal a reciprocal desire for negotiation. All the signs, then, point to a softening of the conflict, and the best chance yet of a compromise being reached.
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