David Heinemeier Hansson

January 25, 2022

Just the cost of doing business [crimes]

The Dutch competition authorities just slapped Apple with a five million euro fine for refusing to comply with the country's new requirements on App Store policies. These new requirements are somewhat oddly contained to just dating apps, as they came as a consequence of a specific complaint from a specific provider, but even with that seriously restrictive caveat, Apple has chosen to blow them off. Because this is just the cost of doing business [crimes]!

The five million euro fine is the first of potentially ten such weekly fines, which will come due if Apple continues to violate the new requirements (like allowing Dutch dating apps the right to link out of app for payment). But as Daring Fireball points out, €50 million is "spare-change-under-the-sofa" money for Apple, a company that literally makes a billion dollars per day in revenue.

This is the problem with fines. They put a price on criminal behavior, and if the gains from committing those crimes exceed the cost of the fines, there's a base hyper-rational calculus that says the company should continue to break the law.

I don't necessarily disagree with the basic incentives here. Fines should be sufficient to deter violations (and these surely are not). But I also have some sympathy with the Dutch authorities. The normal rules of commerce, competition, and regulation just don't apply when you're dealing with a trillion-dollar global behemoth like Apple. For whom a €50 million fine is chump change.

What'll be curious to see now is whether Apple will embrace this calculus, and the odious cape of contempt that comes with it. Because while that might make sense in the short term, there's just no way this is the last stop. If Apple willfully decides to flip off the Dutch and their national sovereignty, I think we might just see the leviathan that is the European Union awaken.