Apple Faces Billions in Losses as EU Comma Interpretation Ends External Purchase Fees (substack.com) 100
Apple will lose the ability to collect commissions on external iOS purchases in Europe starting June 23, following a European Commission ruling that hinges on the grammatical interpretation of a single comma in the Digital Markets Act. The dispute centers on Article 5.4, which requires gatekeepers to allow business users "free of charge, to communicate and promote offers, including under different conditions [...], and to conclude contracts with those end users."
Apple contends that "free of charge" applies only to communication and promotion activities, not contract conclusion, allowing the company to maintain its commission structure on external transactions. The European Commission interprets the comma before "and to conclude contracts" as creating an enumeration where the free-of-charge requirement applies to all listed activities, including purchases made outside Apple's payment system.
Under the new ruling, Apple can collect commissions only on the first external transaction between users and developers, with all subsequent purchases and auto-renewed subscriptions exempt from fees. The company faces daily penalties of up to $53.5 million for non-compliance and has already been fined $570 million. Apple's internal forecasts estimate potential annual losses of "hundreds of millions or even billions of dollars" in the US alone, though Europe demands stricter changes than those projections assumed.
Apple contends that "free of charge" applies only to communication and promotion activities, not contract conclusion, allowing the company to maintain its commission structure on external transactions. The European Commission interprets the comma before "and to conclude contracts" as creating an enumeration where the free-of-charge requirement applies to all listed activities, including purchases made outside Apple's payment system.
Under the new ruling, Apple can collect commissions only on the first external transaction between users and developers, with all subsequent purchases and auto-renewed subscriptions exempt from fees. The company faces daily penalties of up to $53.5 million for non-compliance and has already been fined $570 million. Apple's internal forecasts estimate potential annual losses of "hundreds of millions or even billions of dollars" in the US alone, though Europe demands stricter changes than those projections assumed.
what about that core fee will that be banned? (Score:1)
what about that core fee will that be banned?
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what about that core fee will that be banned?
The article link to the judgment is broken but I believe it's https://ec.europa.eu/competiti... [europa.eu] from 24 April discussed here: https://apple.slashdot.org/sto... [slashdot.org] I don't know what core fees are or why we're recycling this "new ruling".
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Core fees... Apple... Whoosh!
It's not the comma's fault (Score:5, Insightful)
The dispute centers on Article 5.4, which requires gatekeepers to allow business users "free of charge, to communicate and promote offers, including under different conditions [...], and to conclude contracts with those end users."
A rational reading of this sentence would not pair "free of charge" with only first phrase "to communicate and promote offers." If the "free of charge" were meant to apply only to that first clause, the second clause would have been separated into a different sentence altogether.
This is nothing more than Apple trying to wordsmith their way around EU law.
Re:It's not the comma's fault (Score:5, Insightful)
Couching the end of "free money" and fines as hundreds of million dollars of losses is simply Apple's way of getting Trump's attention. Trump will in turn state that he is thinking about doing something about this, and "oh by the way he is having a $1M a plate fundraiser at Mar-a-Lago". Someone from Apple will attend said dinner and promise to buy even more Trump coin and then Trump will impose more tariffs on Europe.
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This is how all American businesses interact with the law. They pretend like the law doesn't say what it says until they get hauled into court.
And, apparently, U.S. Presidents ...
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It's not how EU rules work either. The court will go with the intent of the law, not some grammatical argument.
Re:It's not the comma's fault (Score:4, Insightful)
Exactly. Apple understood the new law perfectly. They know the intent. They just don't like it and are trying to find any excuse for it not to apply.
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like every single other business in the world.
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like every single other business in the world.
like every single other large public abusive businesses in the United States.
There FTFY.
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Abusive business practices aren't the sole domain of the US. EU drug manufacturers (who control large portions of the industry) overcharge Americans who need medication for no other reason than because they can. They can't take advantage of people in countries with stronger laws, where people are poorer in general and can't afford exorbitant drug costs, or where the country doesn't give a damn about pharma IP and makes their own versions of the drugs (India). That leaves them with countries like the US to make their nut, and they do it gleefully
This is more a problem with the US's medical insurance industry. Every time a pharma company (or anyone else for that matter) attempts to circumvent the system by producing or importing cheap pharmaceuticals they are attacked.
The ability to change this is solely with the US legal and judicial system. For some reason the US has no appetite to.
Re: It's not the comma's fault (Score:2)
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This has nothing to do with spam.
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The dispute centers on Article 5.4, which requires gatekeepers to allow business users "free of charge, to communicate and promote offers, including under different conditions [...], and to conclude contracts with those end users."
A rational reading of this sentence would not pair "free of charge" with only first phrase "to communicate and promote offers." If the "free of charge" were meant to apply only to that first clause, the second clause would have been separated into a different sentence altogether.
I agree. In addition, I've noticed, and rewritten, sentences like this in things I've written, like letters/emails, as the single list would have been misleading.
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The problem is that the EU writes terrible English. The alternative -- and bow legally binding -- interpretation is just as bizarre and illogical:
Under the new ruling, Apple can collect commissions only on the first external transaction between users and developers, with all subsequent purchases and auto-renewed subscriptions exempt from fees.
So a developer can charge a user a $1 introductory fee, and then $100 for the next fee, and apple gets a commission only on the first $1?
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My whole point was, the English wasn't the problem. The EU ruling is absolutely in line with the intent of the law. The intent was that Apple has no right to collect a commission on sales that occur within an app.
If that doesn't work for Apple, maybe they should switch from a commission-based pricing model, to a fee-based model, where every app listing costs a set fee.
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Your interpretation squarely contradicts the law and the ruling, which both (apparently) say that Apple can collect a commission for the first sale that occurs within an app.
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From the summary:
Under the new ruling, Apple can collect commissions only on the first external transaction between users and developers, with all subsequent purchases and auto-renewed subscriptions exempt from fees.
This statement does not say that Apple can collect a commission of the first *sale* within the app, but on the first *transaction.* That's not the same thing. That first transaction is generally a subscription fee or a product license fee, not a purchase of products within the app. Even if you are correct that the first sale of a product within the app (which I'm not conceding), app developers can easily change their structure so that the first transaction is for the app or the subscription
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That's a distinction without a difference. Or if there is a difference, it only emphasizes that the ruling allows app vendors to cheat the system by having an artificially small first "transaction", which was my original point.
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And that gets at the underlying root problem: that Apple uses a commission system to make money from app vendors.
A commission system implies that Apple has some role in the app developer's ability to sell products to their customers. Think Walmart, Amazon, whatever other store you want to name. There is *nothing* Apple does to facilitate or promote sales of products by these stores, even when they happen within those vendor apps. There is *no* reason Apple should be allowed to take a cut.
It's greed, pure an
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If Apple ever charged a commission for physical sales, they haven't done it for years. From https://www.theverge.com/21445... [theverge.com] :
30 percent standard commission on apps and in-app purchases of digital goods and services; sales of physical products are exempt. Subscription commission falls to 15 percent after one year.
For on-device content, Apple obviously provides the platform, libraries, infrastructure like push notifications, updates over time, and other services. So there's a basis for them to charge a commission even if you think they should use a different sales model. The current model effectively subsidizes small-volume apps and semi-professional app developers at the expense of the re
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OK, point taken about physical sales. But the same article does confirm that Apple takes a cut of digital sales, which is a pretty arbitrary distinction. What is the rationale for charging a commission on a set of MP3s if they are downloaded, but not when shipped on a CD or DVD?
Anyway, the specific "reasonable" amount can be debated. The reason this is such a problem for Apple is that, for vendors who want to sell (digital goods), they have no choice but to submit to Apple's terms because they can't reach h
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I give up. I explained why the distinction is NOT arbitrary, and you entirely ignored it. And you apparently think that CDs contain MP3s. You also missed that Apple allowed Epic to set up a third party store (in certain jurisdictions) ... but still required a 27% commission on those sales. That got Apple in a different set of trouble, but it was still a question of how much commission they can charge. None of these laws or courts take the position that you did, that "Apple no right to collect a commiss
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I have personally saved MP3s to a CD. If a music vendor wanted to get around the Apple Tax, they could do the same. Yes, I realize that traditional CDs don't contain MP3s, but an uncompressed format. It makes no difference, whether you download an MP3 or rip a CD, you've got the music track. If you download, you pay the Apple Tax, if you get it on physical media, you don't have to pay. Weird.
Apple only allowed Epic to host a store because the EU forced them to. They don't allow it in any "jurisdiction" wher
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So a developer can charge a user a $1 introductory fee, and then $100 for the next fee, and apple gets a commission only on the first $1?
Yes, that's exactly it. Good.
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The problem is that the EU writes terrible English.
Not really. The problem is that all legalese is terrible English. If it weren't, then we wouldn't need courts to interpret what is written. This is the norm in every functional country regardless of the language used. Even the Germans, known for their insanely precise language and verbiage have legal wrangling over grammar in their laws.
The issue here is that Apple lawyers seemingly don't understand how commas work.
So a developer can charge a user a $1 introductory fee, and then $100 for the next fee, and apple gets a commission only on the first $1?
Yes. Preventing Apple from having a say in contracts that it is not involved in is the entire
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The problem is that all legalese is terrible English. If it weren't, then we wouldn't need courts to interpret what is written.
No, we need courts to apply what is written to harder cases, where the world is not as tidy as are words written for abstract goals. As Wikipedia puts it [wikipedia.org], EU English has errors and corruptions "based on common lexical and grammatical mistranslations influenced by the native languages of its non-native English-speaking population". That's reflected in laws like this.
They can provide and charge services - e.g. a fee to download the app, or a fee to use in app payments though Apple's platform, but other than that they can impose no financial conditions on contracts between businesses and their customers.
That's a nice, tidy theory, but it is not what this ruling says. According to this ruling, Apple gets exactly one bite at the apple of the cu
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Many people view the law this way : perfect, absolutely immutable and unchanging for all eternity, with zero room for interpretation. A flawless determination of the ethics and morals of the people, delivered perfectly by perfect lawmakers, perfectly, onto paper. Oh, and every person needs to follow every law, absolutely every second of their lifetime, p
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Europe is doing it's own version of that against the US, passing massive taxes that only hit big US internet companies. That's what Apple is fighting here.
Except that the law in question here also affects Chinese and European companies. That's just not reported much in the (I assume) predominantly American media that you consume.
It's the same situation when the EU levies fines against US companies for breach of regulations: A certain kind of people starts to complain that the EU is doing that just for US companies. Yet the EU is fining EU companies all the time for similar misbehavior, it just flies under the radar of these people as it isn't reported in thei
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My point was that the problem isn't the parsing of the English grammar here. The court's ruling was in fact in line with the intent of the law, which was that Apple doesn't get to collect a commission on in-app sales.
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In this specific case, being a European directive, it is translated in 24 languages, and the English version has no particular priority over the others. I'm checking the text in English, French and Italian [europa.eu] (which I speak fluently), the Enlish and French text are more ambiguous, while the Italian text is very clear that the "free of charge" applies to everything.
So what do the European judge do when presented with this case? They go and study the motivations underlying, they explain it all over several page [europa.eu]
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That's interesting info and I don't dispute it. But I'd argue that even the English sentence is unambiguous. The only way it's ambiguous is if you (or your lawyer) could successfully argue that the comma *was* misplaced, and that the text of the law was incorrectly stated. As written, with the comma, it's clear, and with or without the comma, the intent is still clear.
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Where's the "evil" here? (Also that was Google.)
Thank goodnes (Score:4, Funny)
Slashdot is safe from such nonsense. We don't support such esoteric characters as âoecommas.â
Re:Screw the EU (Score:4, Insightful)
You know that the numbers you use are arabic, right? I mean, except the zero, that was an Indian invention. Guess what's the arabic decimal separator?
it's (U+066B)
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Sorry, Liberia and Myanmar, it is time.
Re: Screw the EU (Score:2)
Re: Screw the EU (Score:2)
There. Fixed that. Now we can all agree and get along nicely. All the muricans, rearopeans, and Python programmers.
<glances around nervously, looking for exit>
Re: Screw the EU (Score:2)
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Re: Screw the EU (Score:2)
Re: Screw the EU (Score:2)
And where is this criticism coming from? Perhaps from a country that uses the imperial system? Should we also mention date notation standards?
Over use the comma, and get into trouble! (Score:2)
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Doesn't ambiguity usually mean a contract is interpreted by default in favor of the party that did not write it?
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And an opposing view: comma doesn't matter; the intent of the law matters [illinois.edu].
The usage in all these cases is called the "Oxford comma [wikipedia.org]" or "serial comma".
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In the worst case it just means there is no contract in effect and you need to make a new contract.
But that's a law. You can't just say "I don't need to follow the law because it is ambiguous"
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What do you mean sloppy - the comma does exactly what is intended.
Lawyers (almost exclusively) write laws
Very vaguely
Then companies pay lawyers a LOT of money to interpret those laws
When two companies interpret the law differently than each party hires VERY expensive lawyers to fight it out in front of a judge - that is another lawyer getting paid a lot of money.
In the end it is the lawyers creating a problem and benefiting from the problem that they create.
Ever hear the joke about a small town having 1 law
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Why is Apple so afraid? (Score:2)
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But app stores aren't a necessity for Android, which allows sideloading apps from anywhere. Apps can be distributed with no need for an app store.
Re: Why is Apple so afraid? (Score:2)
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I'd wager very damned few apps are ever distributed via sideloading. meta makes Facebook and Messenger available via sideloading, mainly to get around some locked-down non-Alphabet Android devices, but for the vast majority of users, if it's not on the default app store on their device, it might as well not exist.
Re: Why is Apple so afraid? (Score:2)
Re: Why is Apple so afraid? (Score:2)
But the next layer of users use Droid-ify or F-droid.. you can't be too careful but, I trust them well enough. Everything has links back to GitHub, for the source and release notes. You should know what you want though, aimlessly browsing is not only tedious and time consuming , but nearly everything is pretty user friendly from there. Apkmirror.c
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Since the Amazon store is gone, the largest store is probably https://f-droid.org/ [f-droid.org]
It works like a Linux distribution. It only has open source apps and it rebuilds each app from source. It also documents anti-features like dependence from non-free services. So you have for example an App that packages ChatGPT in a webview, so you can avoid the official app that has access to more data, but it states in the anti-feature list, that the app does not function without an external, non-free, service.
You can side-l
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Maybe the problem is, that new appstores can be better.
Think of a nice appstore with hand curated apps, no payed placement in the search, filters for free apps and apps without in-app payments or ads. The used tracking frameworks must be stated in the app description. The store takes a monthly fee of $2 from users and optionally allows app developers to use its payment system for a a reasonable fee.
It won't replace the Apple appstore completely. But it will attract many users, who want to have a store of ap
Re: Why is Apple so afraid? (Score:2)
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Both people who may want to run such a store and apple will find out, when apple is forced to enable sideloading.
Reminds me of a joke (Score:1)
What do you call a bus full of lawyers going over a cliff with three empty seats?
A total waste of space!
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what do you call a beach with 100 lawyers buried up to their neck in sand?
A sand shortage
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Q: What did the lawyer name his daughter?
A: Sue.
Q: And his son?
A: Bill.
Bullocks (Score:1)
Making less profit is not a loss (unless one assumes that Apple is entitled to a certain amount of profit), the title is highly misleading.
Lawyers... (Score:2)
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Sometimes you forget that English grammar can undo your legalese.
Don't forget that in the EU the English version of the text is only one of the 24 versions, with English having no precedence over the other 23 languages [wikipedia.org].
English is only an official language in two EU countries: Ireland and Malta, both having another official language (Irish and Maltese) besides English.
So, no, English grammar cannot undo legalese in the EU.
Ask the writers (Score:2)
Re: Ask the writers (Score:1)
You shouldn't even have to ask them. But really their opinion isn't what matters most, it's the intent of the body that passed the law.
Ridiculous (Score:3)
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I'm honestly surprised that this is part of the DMA. I figured this would already be covered under existing anti-trust law.
They need Tech Writers (Score:2)
They probably had some marketer come up with the text. This would not have happened with a tech writer. They'd have asked questions before blindly letting that hit the streets.
Precision is everything.
A very American argument (Score:4, Informative)
In American law, the details of exact wording and comma placement are what counts. We argue over the priority of subordinate phrases and how that could effect the interpretation of a law. (see the arguments regarding the Second Amendment for an example) In America, we can violate the spirit of the law as long as we follow the letter of the law.
In European law, the intent of the law (as long as it is made sufficiently clear) is what counts. Supporting documents are frequently available to document the intent of the laws. Regulators will provide guidance instead of directions ("don't poison people" vs "less than 30ppm"). Businesses and individuals are expected to figure out the details of compliance.
It's not a loss (Score:1)
Colon (Score:2)
They should have introduced the list with a colon, but legal writing is /intended/ to be hard to understand. It creates tons of downstream work for lawyers.
The "Plain English Movement" is an effort to stop doing the that. Here's a reasonable description:
https://ir.lawnet.fordham.edu/... [fordham.edu]
SERIAL COMMA (Score:1)
Also known as the "Harvard Comma" (EN-US) and "Oxford Comma" (EN-UK) the Serial Comma bedevils people who have split opinions on it. See E.G.
https://en.wikipedia.org/wiki/... [wikipedia.org]
In Computer Science study we had an entire hour dedicate to how to interpret the following menu item(s):
Hamburger or hot dog and fries.
Is it:
1. A Hamburger by itself OR a hot dog AND fries
or
2. Either (Hamburger OR hot dog) AND fries
The whole "order of operations" thing we learned in school (you know, like PEMDAS) has different o
Syntax for fun and profit (Score:2)
We can agree EU is not good at tech but world class in extracting revenue from syntax.
Sloppy drafting (Score:1)
The EU is right (Score:2)
They wrote the law. They know what was meant. Even if the wording isn't all that clear, they are the ones who know what the law should do while Apple is the one trying to interpret the (possibly) ambiguous text.