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Apple treats €25m fine in Netherlands like Gautengers treat e-toll bills – just ignore

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Toby Shapshak is publisher of Stuff (Stuff.co.za) and Scrolla.Africa.

Imagine being fined €5-million a week and just not paying it? That’s the weird situation for Apple in the Netherlands, where a remarkable standoff is developing between the computer giant and the Dutch antitrust authority.

The Authority for Consumers and Markets (ACM) hit Apple with this whopping weekly fine after Apple missed a 15 January deadline to give apps other alternatives to pay.

“We have clearly explained to Apple how they can comply,” ACM said in a statement. “So far, however, they have refused to put forward any serious proposals.”

In a fit of restraint, it called Apple’s attitude “regrettable”.

The ACM’s requirements were upheld by a Netherlands court on 24 December, it added. Apple has paid five weeks of fine since it missed the 15 January deadline, bringing its fine to €25-million.

At the centre of the dispute are dating apps that want to use alternatives to Apple’s requirements that all app-based payments go through its payment mechanisms. For this Apple takes a controversial 30% fee.

But, says the ACM: “Apple’s so-called solutions continue to create too many barriers for dating-app providers that wish to use their own payment systems.

“We have established that Apple is a company with a dominant position. That comes with extra responsibilities vis-à-vis its buyers and, more broadly, society at large. Apple must set reasonable conditions for the use of its services. In that context, it cannot abuse its dominant position. Apple’s conditions will thus have to take into account the interests of buyers.”

Apple’s solution, the ACM says, is not practical and will cost developers more. The watchdog “concluded that the revised conditions that Apple has imposed on dating-app providers are unreasonable, and create an unnecessary barrier”.

The new conditions, it argues, “stipulate that dating-app providers must develop a completely new app if they wish to use an alternative payment system”.

For the world’s most valuable company, at more than $2-trillion, the fine of €25-million so far is like the bills Gautengers get for e-tolls and just ignore.

But it’s Apple’s attitude that should worry any observer.

The watchdog body of an elected democracy has ordered it to comply with the laws of that country – and Apple is just ignoring it.

This is not a bona fide freedom of expression issue; this is all about Apple’s revenue split with app developers. When the phone maker launched its App Store in 2008, it was effectively the only mobile app store for this new generation of computers.

But the smartphone ecosystem has evolved significantly, and many consumer watchdogs have taken on Apple for its onerous 30% cut of payments.

Epic Games, the maker of Fortnite, has had some success, as has Spotify in highlighting what it calls an iniquitously high percentage.

Apple’s Tim Cook was one of the CEOs summoned before US lawmakers in 2020 – also including Amazon’s then boss Jeff Bezos, Meta/Facebook’s Mark Zuckerberg and Google/Alphabet’s Sundar Pichai – in a series of congressional investigations into the monopolistic practice of Silicon Valley.

“Apple, you’ve got to break it apart from their App Store. It’s got to be one or the other,” said Senator Elizabeth Warren, who is leading the charge to curtail Big Tech. “Either they run the platform, or they play in the store. They don’t get to do both at the same time.”

Apple’s stance against the Netherlands competition watchdog is deeply worrying. This is a multinational operating within the borders of a democratic country. The way the world works, in a democracy, is that a government is elected with a mandate of responsibilities for its citizens. The key word is elected.

Apple is a listed business. Its only job is to make money for its shareholders. What shareholders would invest in a company that deliberately refuses to follow a legal order – and a court order upholding it – without addressing this obvious lack of ethics?

Apple’s only imperative is profit – and why it’s so adamant it won’t change its app store rules on percentages. This 30% is considered pure profit by most critics, who charge that Apple is abusively using its dominance. It’s hard to argue that in this situation Apple isn’t the guilty party.

Amazingly, shareholders are willingly standing by while a listed company deliberately breaks the law. It’s a morally indefensible position – especially as it’s clearly obvious this is not about freedom of expression, but the equally important right of freedom of choice.

Technically, it’s easy-peasy (to use the technical term) to allow another payment mechanism. This is not a software problem for Apple; it’s a profit problem.

ACM chair Martijn Snoep said in December that “protecting people and businesses against abuse of market power in the digital economy is one of our most important duties”.

Conversely, Apple is all about protecting its revenue from apps.

It’s a fascinating standoff between democracy and profit. Let’s see how long it takes Apple to blink. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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