Apple appeals fine, says EU has ‘gone beyond’ the law

Even though threats of additional fines mean it has been forced to make so many changes to bring its business into compliance with Europe’s Digital Markets Act (DMA), Apple has always said it would appeal Europe’s $570 million fine for violating the DMA. Today, it did just that against, accusing the European Commission of going beyond what the law requires.

In a statement provided to Computerworld, Apple said: “Today we filed our appeal because we believe the European Commission’s decision, and their unprecedented fine, go far beyond what the law requires. As our appeal will show, the EC is mandating how we run our store and forcing business terms which are confusing for developers and bad for users. We implemented this to avoid punitive daily fines and will share the facts with the Court.”

Beyond what the law requires

The company has identified multiple instances in which regulators agreed to one thing and then demanded more, effectively dictating and micro-controlling Apple’s business to the detriment of the company and its customers. The company seems to have two strands to its argument:

The recently introduced tiered service scheme Apple reluctantly brought to market in Europe is one facet. It seems the two sides agreed that Apple could seek compensation for App Store services provided to developers through a Store Services Fee, which Apple announced last year. The regulators then changed their minds, insisting the fee structure include tiers so developers could opt out of some services. This forced Apple to introduce a new model quite recently — even though no other App Store provider offers such services in this way.

In the days following Apple’s latest changes, I saw complaints about the tiered system Apple put in place. But the company was required to split them this way by the regulators, who dictated which services had to be optional. Given regulators don’t actually make anything, it’s no surprise some of their decisions seem somewhat clumsy. 

Lack of clarity and consistency

Apple is also challenging the “steering” concept the regulators seemingly insist should be applied against its business. Announcing its record fine against Apple, Europe also redefined some of the components to justify the move. 

That meant the European Commission changed its stance to say steering wasn’t just about publicizing offers and promotions on external sites, but also about free promotion of offers and services such as alternative app payments within apps. Apple was also forced to permit links from inside apps to third-party app stores. 

Apple’s claim is that in making these changes, the regulators moved beyond the law, redefining the notion of steering in a way that exceeded what the DMA actually required. 

Win or lose, we’ve already lost

Apple will use its time in court to try to prove these claims, but the action will probably stretch across years — unless Commissioners change their approach or the political intention in the EU and/or US shifts.

While we wait, European customers will be able to enjoy the full benefits of the new arrangements, in the form of sketchy in-app pester advertising to use unregulated third-party payment services, a loyalty war as some big apps attempt to use their own market reach to create their very own app store fiefdoms, slow or no appearance of some operating system features and a less-effective search system for applications. 

It won’t all be good news, as I expect some millionaires with the cash to build and maintain App Stores of their own might carve out a couple of bucks from within this inevitable chaos. If you play games, for example, you’ll gain the pleasure of giving money for existentially inconsequential in-game digital boosts direct to the publisher, rather than via the platform. (This does also mean you’ll only have the games publisher to help you when things go wrong, including when your kids purchase in-game currency when using the app. Good luck with that.)

That’s progress I suppose, a change that will give some users a real sense of freedom from the so-called Apple Tax, and will no doubt give Europe’s current neo-liberal leadership a cozy, fuzzy feeling. Perhaps Commissioners should focus their intention elsewhere.

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