Technology giants cannot escape EU fines
Text | Ye Ziling
Source | NewGeek
This has not even been implemented yet, but the EU has taught Apple a lesson: preliminary investigation has determined that Apple's App Store is suspected of violating the EU's Digital Markets Act (hereinafter referred to as DMA).
If Apple is ultimately found to have violated the rules, it could face a fine of up to 10% of its global annual revenue; in the case of repeat offenses, the fine could be as high as 20%.
That is to say, Apple's revenue last year was $383 billion, and it had to pay a fine of $38.3 billion to the EU, or possibly $76.6 billion.
At first glance, this has nothing to do with Apple AI, but Apple said : "We are concerned that DMA's interoperability requirements may force us to compromise the integrity of our products in a way that risks user privacy and data security."
There are a lot of incomprehensible words, but it doesn’t matter. In fact, it just expresses an attitude: If we cannot meet the requirements of DMA, our Apple AI will probably not enter Europe!
Wow, China has a way to get in, but the EU can’t.
What exactly does the DMA stipulate that makes Apple so uncomfortable? I have carefully read the bill and would like to share it with you.
Overall, this bill has one major flaw.
First, the EU said that this bill only targets a specific type of company, namely large technology companies that provide platform services, such as Google's search engine, Apple's app store, Facebook's advertising, etc., and gave them a name:
Gatekeepers .
What I want to say is that these technology companies actually play the role of gatekeepers on their own platforms, only allowing things they approve to pass, thus creating a monopoly effect.
This bill clearly stipulates what these gatekeepers can and cannot do, thereby preventing monopolies and affecting the entry of competitors.
If you think about it carefully, what this means is, how can you get 100 points? How can other students surpass you?
However, the regulated technology companies have already established a mature business ecosystem and solid competitive barriers in the European market. The so-called "prevention" is nothing more than a later settlement, that is, -
Fines, penalties, or penalties.
It’s okay if there’s no fine, just split the business.
Of course, it is not that easy to be targeted by the EU. The bill specifically names seven "gatekeepers": Alphabet (Google's parent company), Amazon, Apple, Booking, ByteDance, Meta and Microsoft.
These companies have one thing in common:
A foreign platform with a huge user base in the EU and extremely high revenue.
In other words, these companies make money from Europeans but contribute taxes to other countries. What is the difference between this and the loss of state-owned assets?
So either pay a fine (tax) or split up and set up a branch in Europe.
Just this March, the DMA Act came into effect, and Apple was caught and severely punished: the European Union announced that it intended to fine Apple 10% of its global revenue because of the "Apple tax" that Apple has been levying for many years.
The sound of this abacus can be heard as far away as China. Even if the revenue in Europe does not change, for every extra 100 yuan Apple earns in China, 10 yuan will be paid to the EU.
However, the EU also said that this was only a "warning" and that if it was a second offense, the fine could be increased to 20% .
Although the fine has not been finalized yet, Silicon Base can only wish Apple good luck in making money on someone else's turf.
Europeans are quite good at using sarcasm. When talking about Apple, the EU leader started with a round of flattery: "We are dealing with the largest and most valuable company on the planet. DMA is not an excessive request."
However, he changed the subject and said with regret: "I find it surprising that some of the most valuable and respected large companies on the planet do not wear compliance as a badge of honor."
The EU always has a way to impose fines. For example, just a few days before this penalty, Apple was fined 1.84 billion euros by the EU for its monopoly in the streaming music business.
Please note that this ticket is not issued under the Act mentioned above.
That’s fine, the new DMA created by the EU is just one of various regulatory bills. For example, there is one called DSA, which stands for the Digital Services Act.
In simple terms, DMA regulates a company's competitive behavior in the market and whether it bullies its peers. DSA regulates whether a large platform or search engine product spreads false information or violates user privacy during the service it provides.
Like DMA, DSA has also identified key regulatory targets, and the scope is even larger: a total of 17 large platforms and 2 search engines are under close observation.
After a careful look, I found that the seven companies identified by DMA have not escaped the control of DSA. Each company has at least one product on the DSA list.
That is to say, once DMA fines you, DSA can find different reasons to fine you again.
They only fine 6% of annual global revenue .
Poor Google, a large number of its products take up five slots in these two bills, which allows the EU to have five meals with one stone.
What's even funnier is that DSA also has to charge law enforcement fees to these big companies. Take Meta as an example. Even if it has done nothing wrong in 2024, it will still have to pay 11 million euros in protection fees to the EU to reward EU leaders for their hard work in supervising and managing Meta's legal and compliant behavior.
In order to ensure that DSA has a strong enough deterrent effect, the Europeans also found a target with a greater public opinion effect than Apple:
Musk.
Last June, eight months before DSA officially came into effect (it came into effect on February 17 this year), an EU leader named Thierry Breton went to San Francisco and conveyed regulatory instructions to a group of technology company bosses, including Musk.
There was even the idea of conducting a "rehearsal" before the bill officially came into effect.
This is the first time I've heard that sentencing has to go through a rehearsal process.
According to reports, Musk's cooperative attitude was extremely positive, and he soon received a public letter of praise from Breton: Twitter was the first platform to undergo a "stress test" and the company took this "exercise" very seriously.
The treatment of this "number one model student" is indeed extraordinary——
Twitter was the first to receive the lawsuit.
Last December, DSA listed a long list of crimes against X (Twitter), including:
The content review team is too small, resulting in great content security risks; information may be manipulated by external groups; false information is allowed to run rampant; deceptive designs are used to induce users to pay; and there are issues with researchers' data access rights, etc.
On February 19 this year, just two days after DSA came into effect, the EU launched a formal investigation into Twitter, and this time also involved Tik-Tok.
Silicon Base went to the EU website and took a look. The special columns for these two bills are basically a wanted notice board.
Both bills came into effect this year, but the EU has been imposing fines on foreign technology companies by charging them with monopoly and information security, in fact "imposing data taxes" on them, for many years.
Another EU policy that scares major technology giants is the General Data Protection Regulation (GDPR). Since it came into effect in 2018, more than 2,000 fines have been issued, totaling more than 4.5 billion euros. Meta alone has contributed more than 2 billion euros.
Google has been fined more than 8 billion euros by the European Union for various antitrust violations.
After all, American technology giants mainly provide Internet-based software services, and it is very likely that new products are developed by American employees in the headquarters office in San Francisco. There are neither factories nor assembly line workers in Europe, only a small service team.
In other words, these companies neither brought much tax revenue nor employment to European governments , but made a lot of money from European netizens.
As early as 2013, Reuters exposed the tax evasion practices of large US technology companies. At that time, 37 of the 50 largest US technology companies did not declare their tax residence in the European market.
There are also some tricks, such as setting up the company in Ireland, where the tax rate is relatively low. In 2017, Meta's sales in the UK reached 1.3 billion pounds, and the tax paid was only 7.4 million pounds, less than 0.006% of sales.
An honest man will also lose his temper when he is pushed into a corner, not to mention that the other person is holding a knife in his hand.
The full text is over.
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