Europe gives Apple yet another regulatory nightmare

As it seemingly remains focused on increasing the cost of doing business in the region, the European Commission’s (trade) war with Big Tech/America by proxy continues with a demand for Apple to stop “geo-blocking practices” on Apple Media Services, including the App Store, Apple Music, TV+, and others. 

It’s a new European front in a battle dominated so far by Apple’s struggles to bring its business in line with the Digital Markets Act in the region. However, to some degree it reflects efforts to give consumers free access to markets across all EU states. But when combined with the myriad challenges Apple already faces in the region, the demand will impose yet  another set of legal headaches and require the company to invest in yet more expensive developer time.  

What’s this all about?

Europe argues that the geo-blocking restrictions Apple employs on its media platforms unlawfully discriminate against European customers based on their place of residence. In Europe, people should be able to purchase goods and services from any EU state.

Further, Europe’s Services Directive requires that general conditions of access to a service don’t “contain discriminatory provisions relating to the nationality or place of residence of the service recipient, unless directly justified by objective criteria.”

So far, so good. But I have a sense that some of the territorial licensing restrictions some copyright holders still keep in place might act as a brake on what Apple can achieve. There was a day not so long ago when music streaming services had to reach a separate distribution deal for each EU member state, and while that has relaxed significantly, it may also be why Apple’s media services evolved that kind of licensing model. But that was then, this is now. (I do suspect Europe and Apple will find these problems aren’t completely within their own control.)

What does Europe want?

What regulators want is for Apple to make a series of changes to how it offers up media services in the EU. “The discrimination of consumers based on their nationality or place of residence is against Union law, therefore unacceptable,” said Commissioner for Justice Didier Reynders.

“Consumers must be able to reap the full benefits of the Single Market and should not face any obstacles while using a specific service and traveling around the EU,” he explained. “The Commission urges Apple to bring its practices in line with EU rules against the unjustified geo-blocking of consumers.”

Europe wants Apple to:

• Make it possible to access its media services via any country interface a consumer wants to use. 
• Allow consumers to pay for things using any means of payment from any country they have available to them. For example, if you have bank accounts in France and in Germany but are registered for your Apple Account in France, you can use either bank to pay your bill. At present you can only use a French bank, as that is where your account is registered.
• The bloc also wants consumers to be able to download the version of an app offered in another EU/EEA country. “Consumers should be able to download apps offered in other EU/EEA countries when they travel to or temporarily stay in that country,” the EU states.

Google has already done it

Apple may be in the Commission’s sights (again) now, but the bloc reached a deal with Google for similar practises last year. Under those arrangements, Google “committed to clarify” how to browse different country versions of the Google Play Store.

It also reminded Android developers that they should make their apps accessible EU-wide and accept means of payment from any EU country on the Google store.

That Google could only remind developers suggests that even when Apple finds some way to bring itself in line with these demands, some developers might still decline to join the ball game. Even the act in question (passed in 2018), notes in Article 3 section 5 some circumstances in which some categories of goods — books — are sold at different prices in certain territories. 

What happens next?

Apple now gets a month to look at what is being asked of it, develop a response, and come up with a set of proposals and commitments to address these criticisms.

The way the Commission phrases how it will respond to Apple’s reply is interesting, “Depending on Apple’s reply, the CPC Network may enter into a dialogue with the company,” it says.

The use of conditionals in that sentence suggests that even if Apple does attempt to being itself into compliance, the CPC Network (Consumer Protection Cooperation Network) might decide to move to enforcement all the same.

If Apple fails to address the concerns or is found to have failed to address them, national authorities can take enforcement measures to ensure compliance, the Commission explains.

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