EU, France Take Action Against ‘Abusive’ Google, Apple App Stores

apple app store

The European Commission has drafted stricter rules for app stores, e-commerce sites and search engines, while French legal action targets ‘abusive business practices’

In its latest move to regulate dominant technology and internet multinationals, the European Commission has reportedly drafted new rules that would place more controls on companies that offer online “intermediary” services, including search engines and app stores, and is preparing to publish the proposals next month.

Meanwhile, France has separately announced it may fine Google and Apple over the types of practices targeted in the EU-wide initiative – namely, what finance minister Bruno Le Maire called “unacceptable” trade practices in their dealings with the developers who list products on Google’s Android and Apple’s iOS software marketplaces.

The fines could amount to “millions of euros”, Le Maire told France’s RTL radio broadcaster, and reportedly follow a two-year investigation by the ministry’s fraud repression unit.

The crackdown on trade practices is one of several fronts on which the EU and France are attempting to moderate what some see as excesses on the part of tech multinationals.

‘Dependency-induced fear’

Other recent moves have aimed to protect the vast amounts of personal data collected by such firms and to create a tax structure that would see internet firms pay proportionately to the revenues they gather from particular EU member states, instead of funnelling all their European earnings through low-tax countries such as Luxembourg and Ireland.

The draft rules targeting e-commerce sites, search engines and app stores would require more transparency from internet companies on how they rank search results and why they delist some services.

It would seek to give smaller businesses, such as developers, more power in negotiating with the larger intermediaries they depend upon. Current redress mechanisms don’t work because of that dependency, the draft states.

“The dependency-induced fear of retaliation of business users limits the effectiveness of any existing type of redress, whether out of court or judicial,” the draft reads, according to the FT, one of several news agencies which said they had viewed the document.

The draft calls for a “uniform set of rules” regarding transparency and redress across the EU. Currently such issues are left to individual member states to regulate.

In addition to app stores, the draft covers e-commerce sites such as eBay and Amazon.

All will be required to offer a general description of the “most important parameters” they use to determine how results are ranked.

They will have to provide a notice period of at least 15 days for changes to their terms and conditions. When they de-list products they will be required to offer an “individualised” description of their reasons.

The commission said in a prepared statement that it is committed to promoting fairness and transparency in business’ relations with internet intermediaries.

“We will come forward with an initiative in the near future,” the Commission stated. “We are at the final stages of the process.”

The proposal must be approved by member states and the European Parliament to pass into law.

Credit: French government
French finance minister Bruno Le Maire

Legal action in Paris

French finance minister Le Maire said the country was planning to take legal action against Google and Apple over the types of trade practices detailed in the Commission’s draft.

Le Maire said the ministry would take Google and Apple to the Paris Commercial Court over “abusive business practices” such as conditions they impose on how data can be used and the fact that the can unilaterally modify contracts.

“When developers develop their applications and sell to Google and Apple, their prices are imposed, Google and Apple take all their data, Google and Apple can unilaterally rewrite their contracts,” Le Maire told RTL. “That is unacceptable and it’s not the economy that we want. They can’t treat our startups and developers the way they do.”

The fraud office recomended fines of 2 million euros (£1.8m) per company, the ministry said, according to multiple reports. Le Maire told RTL only that fines could be “in the millions of euros”.

Between 2015 and 2017 there were “significant imbalances” in the relationship between the app stores and developers, the ministry reportedly said.

A similar probe into Amazon’s relations with the sellers who use its platform is currently being reviewed by a tribunal. In December Le Parisien reported the finance ministry was looking to fine Amazon 10 million euros.

Apple didn’t immediately respond to a request for comment, but Google said its practices conform to French law. The search company stated that it was prepared to defend its position in court.

French president Emmanual Macron, a former investment banker, has been overhauling the country’s laws to make them more attractive to start-ups, while also seeking to impose more controls on tech multinationals in cases such as those targeting Google, Apple and Amazon.

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