Apple risks fresh EU charge over app store rules
Apple
is edging toward another charge sheet from European Union antitrust watchdogs unless it quickly fixes alleged violations of a new digital law that led to a €500 million ($579 million) fine earlier this year.
With the clock running down on a deadline that elapses on June 26th, officials are prepared to hand the iPhone maker an ultimatum to allow developers to inform customers of cheaper deals away from the App Store, according to people familiar with the matter who spoke on condition of anonymity.
If unheeded, that step would then pave the way for new fines under the bloc's Digital Markets Act, which can be as high as 5 per cent of average daily worldwide revenue per day of noncompliance. The people added that Apple could still evade a future escalation if it manages to appease the commission's fears with an imminent proposal that is enough to fix the alleged violations.
Apple was fined on April 23 – the same day Meta Platforms was slapped with a €200 million penalty for its 'pay or consent' ad-free service on Instagram and Facebook. Both US tech giants were judged to have breached strict DMA rules that lay out a series of dos and don'ts for the world's largest technology firms.
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A spokesperson for Apple said that EU regulators keep changing the goalposts for what DMA compliance is, making it impossible to comply with their steering decision. The firm added that it is spending hundreds of thousands of hours working to comply with the bloc's ever-changing regulation.
A European Commission spokesperson said it wouldn't speculate on the next steps while Apple still has time to submit a proposal. It added that regulators have ample regulatory powers at their disposal if Apple continues to be in breach of its obligations under the DMA.
On the heels of Apple's April fine, the Cupertino, California-based firm responded fiercely, accusing the bloc's regulators of discriminating against the company and forcing it to give away its technology for free. Just last year, the company was hit with a €1.8 billion EU fine for shutting out music-streaming rivals on the iPhone.
Over recent years the EU has made costly penalties against firms, including more than $8 billion in fines against Alphabet's Google and a separate order for Apple to pay Ireland back taxes of €13 billion.
Under its abuse-of-dominance rules, it has also forced changes out of Amazon's marketplace platform and Apple's tap-and-go chip, while also investigating Microsoft video conference software, Teams. – Bloomberg
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Irish Times
21 minutes ago
- Irish Times
Swings and roundabouts: hospitality VAT reduction means little or no income tax cuts in budget
Budget season kicks off earlier these days and the holding of the National Economic Dialogue (NED) this week – where interest groups put their case - has sounded the starting gun ahead of October's package. Over recent years governments have favoured using scarce resources for extra spending over lower taxes. And this is set to continue. This means less wherewithal for tax cuts – and here the promised return of the VAT rate for the hospitality sector to 9 per cent looms large. Costing over €750 million a year, it would eat up most of the spare cash for tax reductions. And this will be a big political issue. Because the trade off for this is likely to be much less by way of an income tax package for households. READ MORE The VAT move would leave less cash for what are referred to as income tax 'cuts' – but are really adjustments to the income tax system to take account of inflation. If income tax bands and credits are not adjusted for inflation each year, then taxpayers end up seeing a bit more of their income taken in tax – for example with due to a higher proportion of their income being payable at the higher 40 per cent rate. It is what is called 'fiscal drag' in the jargon and is one of the most powerful hidden tax increases available to any government. Just by doing nothing, the tax burden creeps higher. [ Earning a decent income but still scraping by? Your situation may be about to get worse Opens in new window ] Central Bank researchers found that the average income tax rate on all incomes increased from 24 per cent in 2021 to 24.9 per cent last year in 2023. Much of this is due to more people having higher paid jobs but, according to the bank, fiscal drag – the lack of full indexation of the income tax system for inflation is also factor. Some tax relief has been given in recent budgets, but not always enough to take account of wage inflation. And, as things stand, this may continue into 2026. The mood music is interesting. At the NED, Tánaiste Simon Harris spoke of the " solemn commitment' the coalition has given to reduce the hospitality rate back to 9 per cent. The lower rate had applied from 2011 to 2019, when it was increased back to 13.5 per cent. The rate was then cut for all hospitality business on November 1st, 2020 in response to the challenges faced by these sectors during the Covid-19 pandemic. Bobby Healy on why Manna drone delivery could be the 'biggest technology company in the world for its space' Listen | 67:08 The expiry date was extended a few times, but the rate finally returned to 13.5 per cent on September 1st, 2023. Department of Finance officials finally thought they had won the battle – but then the general election came along and a big lobbying campaign from the sector. The subsequent Programme for Government said: 'The Government will bring forward measures to support SMEs (small and medium enterprises), in particular the retail and hospitality sectors, acknowledging the increased cost pressures on these sectors and this will entail changes to VAT, PRSI and other measures.' [ Income tax, USC and rent tax credits: What budget changes are now in effect for 2025? Opens in new window ] While the return to 9 per cent was not mentioned specifically, we were told that the two big parties had agreed that the rate would be returned to this level for 'food-based hospitality'. This means that cafes and restaurants would get the lower rate, but hotels would not – at least in relation to their accommodation services. Splitting in this way may not be easy – the Revenue Commissioners, according to previous Dáil debates, cautioned about 'administrative and operational difficulties'. What happens, for example, to a small Bed & Breakfast which charges one amount for an overnight stay and 'the full Irish?' How is the VAT rate apportioned? Nonetheless, according to Harris, the die is cast. The problem is that even restricting the cut to food-based hospitality will be costly and take up the vast bulk of any likely tax package. Food-based hospitality may be main VAT beneficiary. Department of Finance officials estimated last year that the annual cost of cutting the 13.5 per cent rate to 9 per cent was €764 million, while restricting the cost to food-based items would cost €545 million. The Department, wanting to stop the return, warned against it in last year's pre-budget advisory papers , saying it would represent an " enormous fiscal transfer of taxpayer's money to the sector which the evidence available at present does not support.' Apart from the cost, the Department said that recovery in consumer spending should benefit the sector, where employment had already returned to above pre-pandemic levels. Ireland's VAT rate was not out of line, they argued, as '14 EU countries have a VAT rate of 12 per cent or higher on food services'. The sector's case is also well known – its representatives point to a large number of closures and the financial pressure on SMEs from official measures including a rising minimum wage, and – from next year – pensions auto enrolment, though some extra impositions have been delayed. But the political choices for the Government are stark enough. The total package for reducing tax in the budget may not exceed €1 billion by much, if at all. The VAT package would thus consume a significant amount of this. Other SMEs may wonder why they are being left out. And households may see a very restrained income tax package, which is unlikely to keep pace with wage inflation. As Minister for Finance Pachal Donohoe said somewhat delphically at the NED: 'If we decide that we are going to make a particular set of decisions and investments, that means there are other things that we will not do.' With uncertainties rising, Donohoe and Minister for Public Expenditure Jack Chambers have both underlined the need for caution. [ Some 1.1 million earners in Ireland do not pay income tax or USC, tax institute claims Opens in new window ] They are likely to spell out to colleagues the trade-offs from the VAT cut, particularly in terms of scope for income tax measures. Trade-offs do not imply that a particular policy is " right or wrong' but focus on what is called the opportunity cost – the price of not being able to use the money elsewhere. The VAT cut is unlikely to provide much to consumers, bar perhaps holding down the rate of inflation they face while eating and drinking out. On the flip side, it will limit the cash for adjustments in income tax bands and credits at a time when many budgets of lower and middle income households are tight. Fiscal drag will take its toll. And households will also feel the pinch from the ending of the once-off universal supports in energy credits and double child benefit - assuming that the Government holds to its indications that these will not be repeated. It is impossible to know how the world will look when the budget is presented in October. But whatever happens the first budget of the new administration, coming after last year's pre-budget giveaway, is going to be far from easy to agree on. Prepare for summer sparks in the Cabinet.
Irish Times
31 minutes ago
- Irish Times
Google suffers blow at EU's top court over record €4.12bn competition fine
Google's hopes of overturning a record EU competition fine were dealt a severe blow on Thursday, after an adviser to Europe's top court agreed with Brussels regulators that the tech giant had used its Android mobile phone operating system to squash rivals. Juliane Kokott, advocate-general of the European Court of Justice, the EU's highest court, said that a €4.12 billion fine issued against the US company should be upheld. While not legally binding, the majority of such opinions are followed by the ECJ. A ruling by the court is expected in the coming months. 'Google held a dominant position in several markets of the Android ecosystem and thus benefited from network effects that enabled it to ensure that users used Google Search,' said Kokott. 'As a result, Google obtained access to data that enabled it to turn to improve its service.' READ MORE The win provides a boost to the European Commission, which is seeking to enforce tough new rules aimed at holding the world's largest tech companies to account. The Android case dates back to 2018, when the EU accused Google of imposing illegal restrictions on Android device makers and mobile network operators 'to cement its dominant position' in internet search. Google said it was 'disappointed' with the opinion. 'Android has created more choice for everyone and supports thousands of successful businesses in Europe and around the world,' it added. The European Commission declined to comment. The initial fine issued by the European Commission was €4.34 billion. When Google challenged that penalty, the General Court in 2022 ruled mostly in favour of Brussels' decision but reduced it slightly to €4.12 billion, a decision the Big Tech group also appealed against. Kokott on Thursday advised the ECJ to dismiss Google's appeal, stating that 'the legal arguments put forward by Google are ineffective'. The fine was part of a trio of cases against Alphabet-owned Google, which has seen regulators fine the company a total of €8 billion over the past decade. The EU's top court has already backed the bloc's decision to fine the tech giant €2.42 billion for favouring its own comparison shopping service ahead of rivals, which can no longer be appealed against. But Google did win its appeal against a €1.5 billion fine from 2019 for blocking competitors in the online advertising market, which the General Court annulled last year. Separately, the EU is wrapping up its investigation into Google's online advertising technology, which it launched in 2023. – Copyright The Financial Times Limited 2025
Irish Independent
an hour ago
- Irish Independent
Ireland is the second most expensive country in the EU
They show that Ireland is the second most expensive country in the European Union for typical goods and services. Prices here are 38pc above the EU average. We are only behind Denmark when it comes to high prices. Back in 2015 prices were 28pc above average in this country. But since then Ireland has been slowly climbing the 'league of shame' when it comes to the cost of living. The findings from the European statistics agency, Eurostat, will put a new focus on the Government's determination not to pay out universal cost-of-living packages for households in this year's Budget. Eurostat found that when it comes to alcohol and tobacco, prices in Ireland are the most expensive in the EU. They are more than double EU average. Finance expert Daragh Cassidy of price comparison site said this is due to government taxation, and more recently, minimum unit pricing on alcohol. When it comes to alcohol alone, prices here are the second highest in the EU, after Finland. Our prices are almost 198pc of the EU average, or close to double what people are paying in other European countries. Food and non-alcoholic drink prices in Ireland are the third highest in the EU, despite this country being a huge producer of agricultural produce. ADVERTISEMENT We are only behind Luxembourg and Denmark when it comes to food prices. They are almost 15pc above the EU average. However, this is an improvement on recent years, as prices were over 21pc above average in 2020. Restaurant and hotel prices are the second highest in the EU, behind only Denmark, at 29pc above average. Communications costs are almost 40pc above average. And Ireland is also the third most expensive country for electricity, gas and fuel with prices over 17pc above average. In better news, clothing prices are actually 1pc below the EU average and cheaper than in Lithuania, Latvia and Poland. Non-EU countries Iceland, Norway and Switzerland were also included in the research and generally have prices higher than Ireland's. Mr Cassidy of said we have known for a while that Ireland is an expensive country and these figures from Eurostat confirm it. 'There are several reasons why prices here are so high. 'These include: our higher wages, a lack of competition in certain sectors, high taxation on certain goods such as tobacco, alcohol and fuel, and lower government subsidies in certain areas such as public transport and childcare compared to our European neighbours.' He said businesses are also faced with high insurance and energy costs, which then get passed on to consumers. Mr Cassidy said Ireland will never be a cheap place to live. 'And it's worth noting that many of the world's most expensive countries such as Switzerland, Iceland and Denmark also have some of the highest standards of living in the world.' He said that wages in Ireland, while high by international standards, generally don't match the salaries in these countries. At the same time, taxpayers in more expensive countries tend to get back more from the Government in terms of better and more affordable healthcare, childcare and public transport — though there have been welcome improvements made here in Ireland in recent years, Mr Cassidy said. He called for the Government to lower our standard rate of VAT, which at 23pc is one of the highest in the world.
