David Heinemeier Hansson

March 7, 2024

Could Apple leave Europe?

Apple's responses to the Digital Market Act, its recent 1.8b euro fine in the Spotify case, and Epic Sweden's plans to introduce an alternative App Store in the EU have all been laced with a surprising level of spite and obstinacy. Even when Steve Jobs was pulling power moves with Adobe and Flash or responding to Antennagate, we never saw such an institutional commitment to flipping off legislators and platform partners. It might have been ruthless, but it didn't come across as personal.

Which is curious! Because you'd think that a creative thinker like Steve Jobs would be more likely to wear his heart on his sleeve than a professional bean counter like Tim Cook. More likely to lash out. But assuming Cook is still signing off on the company's strategy, and it's hard to imagine otherwise, his cool cucumber public persona seems to be turning into more of a hot potato with every aggrieved move Apple pulls. Which raises questions!

Like, what's next if the EU keeps turning up the heat on that already hot potato? At what point does it start to boil? If they're already lashing out with malicious compliance, vindictive App Store evictions, and pissy press releases on account of where we are today, what might they do if the regulatory pressure in Europe doesn't relent next month, next quarter, or next year? What if the EU is actually serious about this?

Well, Apple could quit Europe. Stop selling its products in the EU. While it's a big market, it's actually not huge, by Apple standards. Some 8-10% of revenue. So maybe $35b per year, out of some $383b in total. At what point does Cook look at that number and say "not worth it, we're out"?

Prior to witnessing Apple's actions of the last few years, I would have said no way. Tim Cook just isn't the kind of CEO to make such a big move. He's too conservative, too timid, too focused on the bottom line. But that mental model has been seriously tested lately. A CEO that signs off on public letters like the one in response to their loss in the Spotify case might actually have it in them to do something big.
It's not without precedence that big tech companies threaten to leave a major market. Facebook famously threatened to do just that in Australia over the fight regarding newspaper royalties. But as far as I recall, nobody has actually done it. Not on a scale like Apple and the EU.
But we've gone through a lot of surprises in the last decade. Major, world-affecting events and decisions almost nobody would have contemplated as realistic possibilities just a few years prior to them happening.
I hope there are bureaucrats within the EU at least entertaining the possibility. Stranger things have happened. 

About David Heinemeier Hansson

Made Basecamp and HEY for the underdogs as co-owner and CTO of 37signals. Created Ruby on Rails. Wrote REWORK, It Doesn't Have to Be Crazy at Work, and REMOTE. Won at Le Mans as a racing driver. Fought the big tech monopolies as an antitrust advocate. Invested in Danish startups.