D. Geradin, here.
Wednesday, May 28, 2025
Agendas of the DMA Compliance Workshops available
EC, here.
In the adaptation part of this draft paper, which some friendly economists seem to like in particular, I express some mild reservations on the workshops - still, much better than nothing!
Where is the agentic helper registering for me to all of them?
Done!
Interestingly, Meta is the last invitee, no agenda yet available.
"And so we are now to a point where these larger companies are basically denying consumers the fruit of this incredible innovation"
Luther Lowe Unbound, FT here.
Nothing to disclose: I never had the chance to talk to him but I admire his grit.
German privacy watchdog scraps plans to stop Meta AI training on personal data
Euractiv, here.
[Such a pity the German Court didn't have the 5(2) Meta non-compliance decision to reflect on before deciding]
re:publica 25: Solving Search for the AI age - the future of an ever-evolving product
Video here.
Google was one of the sponsors (Partners) at re:publica.
(Sell ads...Nothing more ;-)?)
Also quite interesting as it shows that Google hasn't been innovating much since becoming a monopolist, actually. Very busy building moats instead (see antitrust cases)?
Agentic seems really the end game, at this point.
Interesting slip of the tongue: "Given the success of AI Overviews, we found that...The success of the AI Overviews and the product market fit that it was finding" - the impression is that the AI push is now the must, figuring out how to repair/rediscover the web (web that AI buries alive) is for later. Providing incentives here and there to keep the ecosystem alive?
Will people continue using Google Search in the future? It'll depend on the competition on the merits, if others have the chance to emerge and be selected (for a DMA-related reflection see this draft paper I really need to finalize now but waiting for the closing arguments from the other side of the pond).
GenZ interviewer: not using Google Search much, rather ChatGPT or TikTok.
Honest answer "I clearly have to find a way to get you to start using Google Search more..." - great, as long as it is by competing on the merits, not by building moats...
UPDATE 5 June 2025:
Would running such adds fall under "competing on the merits" measures?
Monday, May 26, 2025
Apple 5(4) DMA non-compliance decision: First Impressions
EC, here.
Apple's non-compliance decision at first glance: consistently seeing through the gatekeeper's non-compliance game (without access to damning evidence as in Epic v. Apple). Sending an important message to the others as well. Can't wait to read Meta's 5(2) decision too.
One of the advantages of having (non-captured) regulators is that they get to know their regulated entities pretty well, seeing through smokescreen strategies rather quickly. Like a mum dealing with a child she knows all too well.
Some first impressions
The first notable point is the Commission’s confirmation that every set of business conditions offered by Apple to app developers must permit steering, not only those tied to a particular contractual framework developers can choose from. Non-compliance cannot be remedied by offering an alternative, compliant path. In any event, this was not the case here: all the options offered were non-compliant.
On the "Original Business Terms," the Commission had little difficulty: no form of steering was permitted, as Apple itself acknowledged, referring to the practice almost as a time-honoured tradition, not unlike the Romans venerating their own, largely fabricated, ancestral deeds, lost in the shadowy mists of time.
Another notable point is that, insofar as the Original Business Terms, found to be non-compliant, continued to apply to the New Business Terms, the latter were, by that fact alone, already non-compliant. One might wonder whether Apple’s contract lawyers assumed they had been particularly clever, and that the Commission wouldn’t notice. This is also of interest in that the presence of a non-compliant element taints any part that might otherwise have been compliant, though, as noted above, in this case there was nothing compliant to begin with. That principle, of course, may prove important well beyond the confines of this particular decision.
Proceeding further, what stands out is that Apple’s understanding of a “self-executing” obligation appears to translate into business as usual, without any need to venture into "technical complexity ("“required to ‘allow’ developers to contract with end users within or outside of the app, as it has always done”). Even more reminiscent of clinging to a slippery surface is Apple’s argument that the absence of any security exception in Article 5(4) must mean the EU co-legislators intended to give it carte blanche to impose restrictions on app developers’ ability to steer and conclude steered transactions. Naturally, this is because Apple is solely concerned with the security of its users.
As one would expect in the first non-compliance decision, much turns on the interpretation of what amounts to effective compliance under Article 8(1). Importantly, as I noted in a separate comment on the DMA, though I confess I can no longer recall which 😊, the Regulation makes clear that the measures implemented by the gatekeeper must be effective in achieving the objectives of both the Regulation and the relevant obligations. What matters, then, is not whether steering and steered transactions are "theoretically permitted" by Apple’s terms and conditions, but whether Apple allows in practice, including through contractual or technical means, business users to steer acquired end users. It is difficult to imagine that the DMA could function without requiring technical changes on the part of gatekeepers, or that the co-legislators were unaware of this.
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Unbelievable |
Many are the facets that make up the prism of app developers’ freedom to promote and choose the distribution channel they consider most appropriate for interacting with end users, and the discussion of how Apple sought to limit and effectively nullify that freedom is particularly telling. On a personal note, I still recall my very emotional reaction the first time I read the text of the disclosure sheet shown after a link-out. In contrast, the Commission offers a calm and reasoned discussion thereof. The main points are, first, that the recurrence of the disclosure and, second, its wording are both designed to discourage rather than properly inform the user. This attention to what is actually required for users to exercise the rights guaranteed by the DMA is certainly to be welcomed, unlike Apple’s eagerness to cast itself, uninvited, as the guardian of its users’ privacy, a role which in the EU belongs properly to the national data protection authorities (a role which, it must be said, is however often poorly discharged, and we need noyb and others to step in).
The decision then turns to a detailed discussion of what “free” actually means, and whether one can be free yet still required to pay, and, if so, how much. And although it is admittedly difficult to dispute that the text states quite plainly “free of charge”, Apple is quick to argue that, in fact, it was never meant to be there in the first place, and in any event, it should be read far more narrowly, excluding any application to the "conclusion of contracts." The argument wavers between suggesting a drafting oversight and hinting at a sort of Missverständnis, with the Commission cast in a dark wood of discordant translations. And any alternative reading of the otherwise plain terms “free of charge” would turn Article 5(4) into a convoluted mechanism of price control so elaborate that not even socialism would have dared attempt it (I may be overstating it, but only slightly). In any case, Recital 40 itself makes it clear that the gatekeeper may be remunerated for the "initial acquisition."
And here it is crucial, as the Commission rightly does, not to lose sight of the objectives of the DMA. The contestability of Apple’s App Store is reinforced precisely by reducing app developers’ dependence on it. This crucial step presupposes that those developers have real economic incentives to use alternative distribution channels, which is exactly what the DMA seeks to provide. Those incentives, however, either vanish or are signifacantly reduced if app developers must pay Apple for the privilege of concluding contracts after (free!) steering.
Thus, Apple’s express provision of a “Commission Fee” in its New Business Terms, applying to all transactions completed by end users within seven calendar days of each link-out from the developer’s app, constitutes a clear breach of the obligation under Article 5(4). A Commission Fee structured in this way cannot, in any case, be regarded as remuneration for facilitating the initial acquisition of the end user by the app developers (something the DMA does not, in itself, prohibit). What follows is a lengthy, and arguably borderline ridiculous, explanation of what “initial” is meant to convey, which of course does not mean “forever."
In the course of the relatively straightforward dismantling of Apple’s counterarguments, one is struck once again by its appeal to ancestral tradition, in the form of its pre-DMA business model. As the Commission states in no uncertain terms, defending that business model is no excuse for failing to comply with the DMA. On the contrary, complying with the DMA may well require changing the business model itself. Indeed, there is nothing sacrilegious or unlawful about it. As the Commission seems almost compelled to remind to a company whose market capitalisation surpasses the GDPs of most countries, the "Union legislature is permitted to place such restrictions on an undertaking’s freedom to conduct a business, provided those restrictions are laid down by law, respect the essence of that freedom, and, subject to the principle of proportionality, are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others."
Arriving finally at the fitting epilogue of the decision, not the fine, but the cease-and-desist order, the whole matter is dealt with in little more than a single page. Particularly interesting is the comparison with the obligations Apple now faces following its defeat across the Atlantic in the Battle Royale with Epic.
We’ll see in just under a month whether periodic penalty payments will prove necessary.
Update: Apple's statement provided to 9TO5Mac is rather, well, unsurprising:
“There is nothing in the 70-page decision released today that justifies the European Commission’s targeted actions against Apple, which threaten the privacy and security of our users in Europe and force us to give away our technology for free. Their decision and unprecedented fine came after the Commission continuously moved the goalposts on compliance, and repeatedly blocked Apple’s months-long efforts to implement a new solution. The decision is bad for innovation, bad for competition, bad for our products, and bad for users. While we appeal, we’ll continue engaging with the Commission to advocate on behalf of our European customers.”
Also on LinkedIn (not capitulating yet, though)
META/SIAE commitments
Qui. Important precedent in the AI age?
"In particular, if Meta and the negotiating counterparty do not agree on whether the shared data meet the requirements set out in the relevant section of the Commitments, Meta undertakes to appoint a trustee who shall provide the Authority with an assessment of the extent to which Meta’s conduct is substantially compliant with that section"
Sunday, May 25, 2025
Saturday, May 24, 2025
Friday, May 23, 2025
Meta darf, dixit Köln - and the ensuing discussion
Thursday, May 22, 2025
Wednesday, May 21, 2025
Beyond Draghi and Letta: read the #BertrandReport...in a Post!
That said, I’ve always found it a touch odd, if I’m honest, that a banker and a politician, both hailing from a city I adore, albeit a glorious ruin, should be the ones, hand-picked by a German doctor, to tell Europe how to become more innovative ;-).
I'm afraid that, like most articles on this topic, it largely misses the mark.
Which in itself illustrates a key reason why Europe is lagging behind: when you fail to understand the root causes of an issue, you have zero chance to solve it.
What makes me competent to speak on this topic?
Back in the late 2000s and early 2010s, I founded and led HouseTrip which at the time was one of Europe's top startups. We were the first historical startup in which all top 3 VC investors in Europe invested.
So I have a pretty intimate knowledge of the European entrepreneurship ecosystem and what it takes to create and grow a tech company in Europe.
We were pretty promising as a startup. In fact as promising as it can possibly get.
We had a similar concept to Airbnb (with some notable differences I won't bore you with), except we created the company 1 year before they did. Which means we were the first-mover - globally - with a multi-billion-euro concept, strong financial backing by the 3 top investors in Europe and, at some point, a team of 250 people with some of the brightest minds in tech in Europe. Everything we needed to succeed.
And yet we didn't succeed: ultimately we were essentially crushed by our American competitor Airbnb in our home turf - Europe - and we had no choice but to sell ourselves to another American company, Tripadvisor.
Believe me, I've reflected long and hard on how that could have happened. In fact after I left the company in 2015 I even spent 3 months in isolation in the Annapurna mountains in Nepal to reflect full time on exactly that 😅
And I then moved to China, where I spent the next 8 years and where I had the chance to study their ecosystem to understand why they're successful and Europe isn't.
So all in all, I think I have some degree of legitimacy to comment on this topic.
The WSJ article says that Europe lags behind due to the usual suspects, the reasons you constantly hear about: too much regulation, fragmented European markets, limited access to financing, a culture that isn't conducive to the startup grind, etc.
Some of those are true, but imho all are secondary.
Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations 🤷
Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
Because that's the real elephant in the room, and really the story of the European tech scene since the advent of the internet: US startups have shown a remarkable ability to capture European markets despite the supposed barriers, making many of the "usual suspects" explanations for Europe's tech struggles very unconvincing.
In other words, logically, any explanation where both US and European startups face identical barriers fails to address the fundamental difference in outcomes we consistently observe.
Based on my experience, the key problem faced by European startups can be summarized in one word: patriotism.
There is virtually none in Europe, and more than anything that's what's killing EU startups, or preventing them from developing.
It used to drive me absolutely nuts at HouseTrip. What a startup needs first and foremost, especially a consumer-facing startup like we were, is marketing, to become famous.
At first, when I created the company and before Airbnb was even a thing, I used to pitch the company to the media and the general response I would get was almost one of contempt, as in "why would I belittle myself to write about your startup? And furthermore, who would be stupid enough to stay in an apartment when there are hotels? You guys have no future..."
And then Airbnb got launched and the American media started their thing, hyping the company like it was the greatest innovation since sliced bread, like they were national heroes, giving them hundreds of millions in free publicity.
That's when European media started to take notice. Not of us, god forbid, but of Airbnb. The concept was promoted by Silicon Valley, see... so now it was valid.
So I went back to pitch HouseTrip to European media. This time around I was met with a different kind of contempt: "So you guys are like Airbnb? Why would we cover a European copycat when we can just write about the real American original?" Luckily I'm not violent but lets say those moments really tested my civility 😅
All in all, we arrived in the absolutely grotesque situation where, despite Airbnb not having yet set foot in Europe, they were already a cultural phenomenon there, promoted by European media, for free, when the European original - yours truly - had to spend millions on paid marketing (mostly to Google and Facebook, American companies) to achieve a small fraction of the brand recognition.
Which means that, insanely, Airbnb was probably doing more business in Europe than we did before even opening an office there, simply on the back of the free publicity they were getting. How on earth can you even compete with that?
This dynamic was at play with general European elites too. I remember very clearly having dinner next to a legendary European entrepreneur and investor - who I won't name, a man who supposedly, on paper, is dedicating his life to furthering the European tech ecosystem. We naturally got to talk about HouseTrip and he literally told me, and this is an exact quote: "you know I don't really like copycats, they really hurt the European ecosystem." Another big test for my civility that night...
And even if we had been a copycat, so what? That's how China got started, there's nothing to be ashamed of. You need to learn to walk before you can run.
In fact if you study the history of innovation you'll find that every major tech power, including the US, started by imitating and adapting others' innovations before developing their own.
Speaking of China, again a country that I know in depth for having lived there for 8 years after HouseTrip, I've come to the conclusion that patriotism, a deeply rooted mindset of sovereignty, is truly the magic ingredient behind their success.
Contrary to popular belief, they don't do it in a stupid way by just banning competition. Those cases are actually very rare and only occur if the companies in question violate Chinese law in pretty egregious ways.
Most of the time it's the exact contrary: they welcome foreign companies and competition, but create conditions where local alternatives can thrive alongside them, giving Chinese users and businesses legitimate options to choose domestic champions.
Which means you end up with, for instance, Apple doing well in China but simultaneously allowing the rise of Huawei or Xiaomi. Or Tesla doing well in China but simultaneously allowing the rise of BYD or Nio. Etc.
And China is, interestingly, more comparable to the EU than most people realize. It is, again contrary to popular belief, extremely decentralized when it comes to doing business, with various provinces competing against each other much the same way EU countries compete against each other.
But they do it in such a way where, again, the overarching sense of Chinese sovereignty never gets sacrificed at the altar of provincial competition. And where the ultimate goal is to develop Chinese champions which can successfully compete on the global stage.
So there you have it, the dirty little secret behind Europe's lag. We're essentially witnessing a "colonization of the minds" whereby Europe has structurally internalized its technological inferiority, celebrating American startups while dismissing its own homegrown companies.
Why does this barely ever get talked about? Think about it: do you seriously think that the Wall Street Journal would start advocating for, essentially, policies hostile to American tech dominance?"
Much better to focus on the usual red herrings like too much regulation or fragmentation which, conveniently, would primarily result in clearing obstacles for American tech giants to dominate European markets even further, rather than nurturing homegrown competitors. This article is, in itself, an illustration of the "colonization of the minds".
Tuesday, May 20, 2025
Mikaël Hervé: BigTech & Digital Advertising: Analysis of the Latest AdTech Competition Law Cases
Chez Oles, here.
Not clear to me who the current (and past) clients - and the conflicts of interests - are, TBH.
Wish list for the next Merger Guidelines
All of them, please!
'Targeted' here.
'General' here.
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Disclosure : for 7 months covering Maria Luisa (Isa) Stasi’s leave, I had the honour of working with Article 19 and contributed to a civil s...
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Video here . Thank you for asking, Robin. This is my short answer but happy to discuss it further. Concerning the very few words I loved ...
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From LinkedIn, here . "Die Stiftung Marktwirtschaft gedenkt heute an die vor einem Jahr verstorbene Wettbewerbsjuristin Heike Sc...
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From the DMA Team, on the only platform (US, ça va sans dire) they really feel at ease, apparently: here. My answer to the riddle: "E...
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Obviously, I don’t have the answer. If you're waiting for antitrust to step in (is it exploitative behaviour? bundling? is there ...
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EDPS, Video here. I’ve watched almost all of it, but in terms of substance it was rather thin. Von der Leyen I's data economy strate...
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Re:publica 25, hier.