James Heppell, representing Open Web Advocacy, published an article detailing his experience attending DMA compliance workshop in Brussels, in which members of the public can ask questions of companies who have products designated as gatekeepers under the DMA. After attending the Apple one, he concludes:
As a final thought, I called this article “Apple Vs The Law” primarily in reference to the rule of law, about how it should be applied equally and fairly against all, no matter the size and influence of your company. I think some of these gatekeepers – above all Apple, do a lot to undermine this process, in some places genuinely damaging trust in democracy. Going out of their way to paint the DMA law and the EU as overstepping and extreme hurts its reputation, as does the invented rhetoric about it being the “great risk to privacy ever imposed to government” (China?), or that they’re “acting without experts in the field”. Similarly for the number of covertly funded and supported lobbying groups that they bring to regulators all around the world. And the constant pressure from the US administration to not enforce the DMA – helped in no small part by these gatekeepers. These money-driven practices – which in many ways mirror the propaganda typically produced by authoritarian regimes like Russia, seriously hurt all democracies that they come in to touch with, and is a kind of behaviour that should make Apple, and any other group involved, ashamed of themselves.
↫ James Heppell
Sometimes I wonder if us Europeans wouldn’t simply be better off without these lying, scheming, law-breaking American technology companies. Yes, there’s be a bit of a shock and a chaotic scrambling as newcomers fill the void, but I think I’d prefer that over the illegal behaviours that are clearly endemic in US technology companies. As a EU citizen, I’m not even afforded 0.01% of the kind of silk glove, patient, and cooing treatment these corporations get when they break the law, and it highlights once more just how tiered justice really is.
I think the EU would, in the long term, be better off without the likes of Apple, Google, Microsoft, Amazon, and Facebook routinely and repeatedly breaking our laws. Rip that festering, rotting band-aid off and endure the chaos for a few years while European newcomers fill the void in a beautiful explosion of competition and innovation.
Do we really want to be tied to these corporations that clearly despise us?
The author is absolutely right that the tech companies are trying to undermine laws that empower owners. What’s unfortunate is that no governments, including the EU, did enough to curb these abuses when they were still nascent. So many of us were calling out this crap very early on and we were all ignored. Going in and trying to fix it after the fact is better than nothing, but now it’s infinitely more difficult and ugly. Not only is there a far larger power imbalance to contend with, but such a long delay means there’s been a lot of opportunity cost as well, like loosing out on the competitors and innovation there would have been had monopoly abuses been curbed in the first place.
Thom Holwerda,
I for one am glad people are talking about it at least, but I suspect these things are far easier said than done. Nobody can compete with the oligopoly. I suppose banning their products would open up new opportunities, but there’d be tons of collateral damage. I can’t tell if what you suggest is even politically viable, but don’t forget about the political blowback you’d get from President Taco. The damage to all sides could be very significant – it could turn into an economic version of “MAD”…
https://en.wikipedia.org/wiki/Mutual_assured_destruction
Alfman,
Yes, it is usually the case that companies are trying to “work around” EU rules. However EU themselves are not above criticism either.
So far, even though their stated aim is to help consumers, time after time, their actions were contrary to those goals. As they focused on punishing companies for success and taking away perfectly fine options instead of generating solutions.
The entire EU – Google Android debacle is one such case. Yes, they called out Google for bundling Android with their apps, and closing down APIs. However the end result is a much complex minefield of licensing schemes, and the possible entire shutdown of Android Open Source Project (AOSP).
Where was the problem?
EU does not like any of the solutions. Nor they are satisfied if you actually adhere to the written laws and regulations. They feel something is wrong, and they would like to extract money.
(Here I can speculate a major reason is they have not enough native tech companies and they cannot tax foreign ones, so they depend on “punitive fines” as a way of “alternate taxation”. But, they should just be open about it, and not break systems).
Back to Android. When Google said “okay, we won’t bundle. But our APIs are product of hard work, and we will charge for them”, EU became furious. They basically wanted Google to do the hard work, while others (EU or Chinese) benefit from it for free. They were even more so when Google would be giving discounts for pre-installing certain apps
This is very similar to bundling, but nothing is forced here. Basically: “Core APIs are free. GAPIs are $40 for Android. If you bundle certain apps we will give you a $40 discount”. This sounds like the old way. But there is nothing stopping say Bing, Baidu, or Yandex coming up with their own bundles and discounts:
“Hey Samsung, this is Microsoft. We have a proposal: if you Bundle Bing + Xbox Game Pass with your devices, we will give you a $45 discount” (this is very similar to what happened with Mozilla and Yahoo! at one point).
(Not sure what the exact numbers were, so if they are off please feel free to correct)
However EU’s stance is: “we want $x billion, and also we want EU companies to have unfettered access to your hard work, and no, you cannot charge for it, and no even if you objectively meet all the written requirements, we will not be satisfied, and no we will not tell you what will satisfy us, it is your job to figure that our (we don’t know either), and yes, we will fine you if you fail to figure out what we like”
This entire thing is frustrating and counter-productive. They should just come out with a flat tax “$10 per Android device sold” or something similar, and not waste a perfectly good opportunity to improve consumer satistfaction.
sukru,
TBH I wouldn’t rank google as the worst offender here. While they benefit from unfair bundling, apple are the ones who systematically and repeatedly disregarded government orders to stop blocking competition and penalizing owners who opt for competing services. The deliberate non-compliance has been ongoing so I think the EU needs to get more aggressive – put holds on bank transactions until apple actually stop the violations and put in a good faith effort for once. To be clear, I really hate this solution; it should never reach this point, but we’re in an era where corporations genuinely believe they are above the law and it seems the only way to really send a message to them is to “take away their credit card” (so to speak).
I haven’t followed it closely, but it becomes a red flag for antitrust regulators when one monopoly seeks to use it’s monopoly power to gain control over another market. Also keep in mind that antitrust regulation is a bit unique in that activities that would otherwise be legal can be scrutinized because of the dominant position.
I don’t think taxing android devices is a goal though. At the end of the day it’s about ensuring the viability of healthy competition. I compare it to the MS antitrust lawsuits. Remember that prior to antitrust intervention much of it was behind MSDN paywalls, the lawsuit changed that and I actually do think we’re better off for it. I’ll grant you whether the EU’s plan can succeed is up for debate. Still though maybe in years time people will see the opening of google APIs in the same light.
Alfman,
I can only talk about Android case, but others might chip in for Apple.
I wish they actually did that.
This is just another plot to improve their bottom line, not the local tech market. It is never actually about the competition (hence the monopoly anti-trust parts, too)
After Nokia’s demise, there is basically no exciting tech companies are left in the EU. Yes, I know they are very strong in open source like the awesome VLC project, Arduino devices (I love them), and SUSE linux (was a long time user, though not any more).
Yet, what is there as in growing companies?
Spotify? Already mature, and cannot enter other markets.
SRP? Another monolithic Oracle clone. (like neither of them)
Hugging Face is great, and so is Mistral. There is some movement in the French in AI sector (nice!). But that is about it (as far as I know).
The EU rep tape and over regulation killed their internal market, and now they are trying to harm others that serve them. I’m not sure this is helpful to the EU public at large.
(Yes, MSDN opening up was nice, but it would probably happen on its own. Competition was already punishing them for incompatible Visual C++ shenanigans)
sukru,
I think I can agree that governments in general (and not just the EU) haven’t been that successful at spurring small companies and their innovation. That is half the equation, however I would still say that untouchable tech giants are an inherent part of the problem. Even if they are bound by the same rules as everyone else, their sheer scale makes it easy to forcefully displace and strangle everyone beneath them. I know we’ve talked about it before, but so many of my clients have gotten awful google support. yet they still get the business because their monopoly is so strong.
In an alternate universe where microsoft was never challenged in antitrust court, I suspect an unrestrained microsoft would have kept abusing it’s monopoly to take over many more markets….not just the browser, but internet services, mobile, search, etc. Who knows, even google may owe it’s existence today to the MS antitrust case that bought everyone relief from MS monopoly tactics for decades.
Alfman,
I agree with you on principle… on what is needed, but disagree on what is actually done.
Yes, ideally they should just get out of the way (most of the time)
true, they can distort the market
especially more so by buying politicians (Disney + copyrights), building fake sentiment (sugar / syrup manufacturers with the rise of diabetes), lie (tobacco), or outright block others (regulatory capture)
For example, when ChatGPT first came around, they wanted free and unfettered access. However as soon as the open source alternatives like Meta’s llama, or Mistral became viable, they ran to the “big brother” crying to have some “sensible regulation”
In other words, they want to close the door to upcoming competition by having governments on their side, and adding massive new bureaucracy that would inconvenience them, but significantly hurt the competition.
They had a rather big mismanagement problem. They could not have competed against Google even if they wanted to.
Yes, they had some bad practices (like banning OEMs from selling other operating systems), but the government action was once again too little too late.
Actually… I can make the same argument here. They became big, and got into Washington’s crosshairs. DOJ opened an anti-trust case asking them to be torn apart. It was a corporate death sentence.
What happened?
They significantly increased their government spending, made “contributions” to both parties, the industry came together and built BSA The Software Alliance for legal lobbying… sorry bribing…
End result?
They got what is roughly a slip on the wrist.
Sorry, I want to be idealistic. But I have seen this movie one too many times.
sukru,
Well, clearly they were mismanaged for a fair market, but competing fairly was never microsoft’s strong suit. That didn’t matter because microsoft was optimized for a different strategy: exploiting their monopoly! This was their main playbook and it yielded win after win against competitors large and small. Google only became dominant after microsoft’s wings had been clipped. So if the MS monopoly playbook hadn’t been taken away by antitrust regulators, then it seems less likely for google to stand a chance against Microsoft at their strongest.
I agree, antitrust regulators on the hunt are a monopoly’s worst enemy. Still it’s fairly rare and on the whole Google have benefited from being a monopoly too. I’m sure you’ve noticed this as well but Google aren’t competing or innovating as much these days since they can count on the monopoly to do more of the heavy lifting.
I agree, microsoft weren’t strongly penalized for what they had done. Nevertheless the binding agreement to oversee microsoft’s business dealings for the next two decades meant that microsoft could no longer use the monopoly playbook…and it showed as Microsoft struggled to enter new markets in the 00s and 10s.
I don’t think the world is idealistic either and I acknowledge many of the faults of government regulation. The regulation came about in the first place because unregulated corporations weren’t so great in the past. Consolidation reached a point of having no choice whatsoever and even company towns where monolithic companies literally owned absolutely everything.
All things considered, I think we have to conclude that antitrust regulation is better than no antitrust regulation. Where I think we’ve failed is waiting decades to intervene. Whereas a simple course correction early on would do, now we have to face moving mountains and destroying tons of property. Also, delayed justice isn’t justice at all for the competition that got squashed years ago.
Unfortunately, there is a reason why these big companies started in the USA, and the EU has little startups with the potential to be a magnificent. And, since I think the lack of innovation roots into the education system, I have little hope will not be that fast to take any leadership. In fact, officially, in term of innovation, UK and CH are the leaders of the continent,
Oh please, Thom, if we don’t buy American OSes, what OSes would take their place? What major OSes does the EU make (now that Symbian is dead)? Yes, we could all theoretically use Linux Mint or some other Desktop Linux distro slapped together in Europe, but people, organizations, and even governments want compatibility with one of the two major app ecosystems on the desktop (Windows and MacOS).
The fact Valve (a private company and DRM peddler) has done more for Desktop Linux than the sum of the EU combined (corporate and governmental) is pretty telling. Also, MicroG (an open-source replacement for Google’s GMS/PlayServices) receives so little funding from the EU (corporate and governmental) that it’s practically useless. Maybe we can get Epic or some other DRM peddler to fund this too.
kurkosdr,
You touched an important point.
EU in general is in “always complaining” mode, but they are not actively doing anything about fixing their situation.
Their choices are between American or Chinese, and when they go with Chinese alternatives to spite the US, they get into even worse situations.
The best thing, for everyone involved, would be Europe becoming innovative once again. They had a good run, but again, after Nokia fell, there is basically nothing major to talk about.
(And a big reason Nokia / Symbian fell was their anti-consumer practices including hostile upgrade paths: “you need an update to the OS, you need a new device. That $500 piece of plastic you bought last year? No longer supported”)
sukru,
I imagine many people will agree governments don’t do enough to help out the little guys. However that doesn’t really imply that the EU are wrong about stopping monopoly abuse, which is why I have trouble understanding your disdain of antitrust policy. What good is it to invest in new startups if we don’t stop the abuse first? Otherwise it will have been a waste of time & money and the startups will get killed again and not able to compete in a rigged market.
I will concede that the relative lack of antitrust enforcement in the US yields far stronger corporations that dominate the world. It’s undeniably true that these corporations hurt if we apply antitrust as the EU is doing. In the absence of antitrust in the US, corporate profits have reached unprecedented highs. If that’s all that mattered (and I know that to some people it is), then yes antitrust is bad. However should governments promote corporate welfare at all costs over everything else? All-powerful corporations have basically never had consumer interests at heart, especially not after they squashed the competition and eliminated our choices. It’s inevitable that such egregious industry consolidation leads to less competition. It’s not a coincidence that decreasing competition leads to less innovation and worse customer service even as profits go up. Antitrust is rarely applied before 50% market share, but by then the market is already completely broken. It’s very upsetting to me when someone claims the market is fine because we have a choice between two dominant corporations….no! Duopolies are already proof that the market failed to produce competition. Ideally I’d like to see smaller but much more responsive interventions to stop market abuse tactics before the market deteriorates so much.
In short, I do agree with you that governments can do more to foster startups. However unless we can rebalance the market, startups have no fighting chance to compete against existing giants. They hold all the cards. If we genuinely want startups to succeed, then for better or worse we have to prevent the top from taking those opportunities for themselves. I understand this bothers some people, but if we keep letting giants take all the opportunities then we’re really living a bastardization of the adam smith vision which only works for the very top.
Alfman,
Once again, I am not fundamentally against government action. However in practice they only do lip service to move forward whatever background agenda they have.
Nokia for example de-factor (and later officially) controlled the Symbian OS. Almost all devices were incompatible with each other across manufacturers, and usually even for the same manufacturer between different versions.
They locked down advanced features like the PC suite (Ovi?), maps and similar to Nokia devices.
EU basically did nothing. Even when they fully acquired the operating system:
https://www.nokia.com/newsroom/nokia-acquires-symbian-limited/
One might argue they never reached the power of current players, so it did not trigger regulatory action.
But
a) For a period of time cell phone meant Nokia, they “owned” the market (and the operating system)
b) It also shows whatever Android currently does it transitory as market monopolies rise and fall naturally based on competition.
One might even argue “EU is fixing past mistakes”
But that would also be flawed.
Anyway,
I think we have already made all the arguments we can. Do you think this is a good place to agree to disagree?
sukru,
I am not sure if I’ve understood your views on antitrust completely, but it’s possible we just disagree, in which case I accept 🙂
I suspect the qualifier is not need, the problem is the huge monolithic multinational corporations, not the country they exist in.