EU swipes at Apple snubbing Dutch antitrust enforcement

The European Union’s head of digital policy, EVP Margrethe Vestager, has hit out at Apple — suggesting the company is deliberately choosing to pay fines to avoid compliance with a Dutch antitrust order requiring it to allow dating apps to make use of third party payment tech when selling in-app content.

On Monday the tech giant racked up a fifth penalty payment of €5M in the Netherlands, bringing its total fine to date from the Dutch competition authority over this issue to €25M — still with no compliance in sight.

In her speech in the US yesterday, EVP Vestager, who also heads up the bloc’s competition division, highlighted a key plank of her digital policy — the incoming Digital Markets Act (DMA), which will apply ex ante rules to the most powerful, intermediating tech platforms (aka “gatekeepers”) — but also flagged the looming challenge of effectively enforcing the list of operational ‘dos and don’ts’ EU lawmakers intend to impose to proactively combat abusive behaviors by dominant platforms and restore fairness to digital markets.

“Some gatekeepers may be tempted to play for time or try to circumvent the rules,” warned Vestager. “Apple’s conduct in the Netherlands these days may be an example. As we understand it, Apple essentially prefers paying periodic fines, rather than comply with a decision of the Dutch Competition Authority on the terms and conditions for third parties to access its appstore. And that will also be one of the obligations included in the DMA.”

Apple was contacted for a response to Vestager’s remarks.

“Effective enforcement, which includes the Commission having sufficient resources to do so, will be key to ensure compliance,” Vestager also said, before going on to make an appeal to US lawmakers to align with — or at least support — the EU’s approach of targeted ex ante competition rules for tech giants to give the best chance of market regulation succeeding in the digital sphere.

“We want our work on the gatekeepers to inspire other jurisdictions in the same way,” she said. “And we’re seeing it happen – for example in Japan, the UK, and Australia. In the US, several bills are progressing through Congress and Senate, and they share many features with our proposal. This is very encouraging because it means that there is a great degree of global consensus.”

Bills very often fail to make it through Congress and the Senate — but the EU is making it clear that it hopes US lawmakers will unite to get digital competition reform through.

“The impact of our digital legislation will depend as much on what happens outside the EU’s borders, as within,” Vestager also said, pointing to the Trade and Technology Council, and what she couched as “a renewed transatlantic partnership for finding common approaches to these issues”.

“Specifically for competition policy, we have launched the new Technology Competition Policy Dialogue, which builds on our longstanding tradition of cooperation,” she also noted, adding: “The EU and the US may not end up with the exact same laws, but it is becoming increasingly clear that we share the same basic vision when it comes to developing digital policy to protect our citizens, and to keep our markets fair and open.”

The not-so-subtle subtext here is the EU isn’t sure the DMA on its own can be an effective tool for rebalancing tipped digital markets — and that regulating the most powerful tech companies in the world requires a global response that must include the US, given that’s where most of these companies actually come from.

Hence Vestager also pressing the case, in front of a US audience, for the DMA being “objective and non-discriminatory” — in a bid to counter accusations that Europe is being protectionist by devising punishing rules that will largely only punish US tech giants.

“Both our credibility as an enforcer, as well as our commitment to free and open trade, demand that our actions apply equally, regardless of the origin of the companies concerned,” urged Vestager. “Gatekeepers will be designated based on size and reach within the European market.”

The bloc’s ongoing failure to vigorously and uniformly enforce flagship data protection rules against tech giants also looks instructive here. The US of course still lacks a comprehensive federal privacy law.