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Apple and other U.S. Tech Companies are definitely on a Collision Course with Europe's new Digital Markets Act that's likely to get very nasty


According to a new report this morning, Apple Inc.’s troubles in the European Union are just beginning, even after it was hit with the third largest antitrust fine ever doled out by the bloc.

This Thursday, the EU is betting that a new sweeping law will rein in the excesses of Apple and some of the world’s most dominant tech firms after decades of market dominance that the bloc struggled to contain.

The Digital Markets Act will force the likes of Alphabet Inc.’s Google Search, Apple’s App Store, Amazon.com Inc.’s marketplace and Meta Platforms Inc.’s Facebook to heed a strict list of do’s and don’ts — or face the threat of significant fines.

The world’s most ambitious digital regulation is being closely watched by other nations, including Japan, South Korea, Turkey and the UK, which are contemplating their own versions.

Under the DMA, it will be illegal for certain platforms to favor their own services over those of rivals. They’ll be barred from combining personal data across their different services, prohibited from using data they collect from third-party merchants to compete against them, and will have to allow users to download apps from rival platforms, among other limits and obligations.

Apple, fresh from its €1.8 billion ($2 billion) fine for shutting out music streaming rivals from its App Store, will come under fresh scrutiny after it announced an overhaul of its iOS, Safari and App Store offerings in the EU, which the European Commission is likely to investigate further to determine whether they fall in line with the rules.

Fines for violating these rules can amount up to 10% of a company’s total annual worldwide revenue, and up to 20% of global turnover for firms who repeatedly flout the rules. Apple reported revenue of $119.6 billion in the first quarter, including $69.7 billion from the iPhone alone, with sales from the device up 6% from a year ago.

Despite what will likely be lengthy litigation that comes out of the changes, the DMA has already started to have the intended impact.

Other well-known platforms are set to face growing scrutiny under the regulation too. Last week, Elon Musk’s X and Booking Holdings Inc.’s accommodation platform both informed the Brussels-based watchdog that they might meet the DMA’s criteria.

But Big Tech players are also gearing up to challenge the DMA through the bloc’s courts. Apple, Meta and TikTok are all fighting their designations as “gatekeepers” under the rules.

“The most significant challenge is from Apple, because it challenges one of the DMA’s rules, which requires it to give app developers the same ability to use iPhone functions which Apple reserves to itself,” said Zach Myers, the assistance director for competition at the Centre for European Reform. “But even if that case succeeds, most of the DMA will still be in force.” For more, read the full Bloomberg report.

The Biden administration is oddly against big tech that helped him get elected. They won't lift a finger to help U.S. tech companies fight Europe's new DMA. U.S.  companies built the apps, stores and devices that made the internet what it is today. 

A Republican win this fall would likely lead to a badly needed trade war to get the EU to back off trying to give European tech companies an advantage over those who invested in making the internet what it is today. Spotify was a bloody music pirate that hurt the music industry and Apple fought for musicians to be paid fairly. Now Spotify is the victim? Give me a break!

10.0F - Apple News


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