European sanctions against Apple and other tech giants need to be much more severe if companies are to take them seriously, argues the bloc’s competition watchdog.

European Commission competition head Margrethe Vestager points to Apple’s failure to properly comply with a Dutch App Store ruling, seemingly preferring instead to pay the weekly fine of €5M ($5.5M) …

Background

We previously summarized the case referenced here.

Apple is facing antitrust pressure both home and abroad in respect to its monopoly on the sale of iOS apps. 

In the Netherlands, the company was told that it must allow alternative payment methods for dating apps in the country. The company reluctantly agreed, but made it as hard as possible for developers to take advantage of the fact. 

“Developers will need to create and maintain a completely separate app binary which includes special entitlements, and is only made available in the Netherlands App Store […] As part of requesting the entitlement, applications must declare what payment processor they intend to use, purchase support URLs, and other information.”

The company followed this by saying that developers would still have to pay a 27% commission if they used a third-party payment platform, making it more expensive to opt out than to stick with Apple. Dutch regulators responded by saying that this was not a “serious proposal” – and levied a fifth fine, taking the total to €25M ($28M).

European sanctions need to be tougher

Vestager made the remarks in an interview with The Verge, saying that the ultimate sanction against non-compliant companies would be to break them up.

Q. I think there’s often a sense of cynicism around tech company enforcement — that the companies will just opt to pay a fine and get a monetary slap on the wrist. How does the Digital Markets Act address that?

A. It’s not just a theory. The Dutch competition authorities had a case where they asked Apple to change a certain behavior in the App Store, and so far Apple has not implemented those changes and they pay a weekly fine — I think it’s five million euros. And that is really thought-provoking, because the idea, of course, from the Dutch authority is that in implementing those changes, you’d have a more fair market situation.

This is why, in the Digital Markets Act, there is a full toolbox where the sanctions become more and more severe. The fines will increase if you do not implement changes. Eventually, in the toolbox, there’s also the tool that you can actually break up a company if no change is happening, or if you are a repeat offender.

In addition to the Dutch case, the European Union as a whole has three open cases against Apple.

We have three Apple cases: one concerning music streaming services and the 30 percent fee, then we have a more general Apple App Store case, and then we have an Apple Pay case about access to the payment infrastructure or technology on your phone.