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Apple Faces Billions in Losses as EU Comma Interpretation Ends External Purchase Fees

3 months 1 week ago
Apple will lose the ability to collect commissions on external iOS purchases in Europe starting June 23, following a European Commission ruling that hinges on the grammatical interpretation of a single comma in the Digital Markets Act. The dispute centers on Article 5.4, which requires gatekeepers to allow business users "free of charge, to communicate and promote offers, including under different conditions [...], and to conclude contracts with those end users." Apple contends that "free of charge" applies only to communication and promotion activities, not contract conclusion, allowing the company to maintain its commission structure on external transactions. The European Commission interprets the comma before "and to conclude contracts" as creating an enumeration where the free-of-charge requirement applies to all listed activities, including purchases made outside Apple's payment system. Under the new ruling, Apple can collect commissions only on the first external transaction between users and developers, with all subsequent purchases and auto-renewed subscriptions exempt from fees. The company faces daily penalties of up to $53.5 million for non-compliance and has already been fined $570 million. Apple's internal forecasts estimate potential annual losses of "hundreds of millions or even billions of dollars" in the US alone, though Europe demands stricter changes than those projections assumed.

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About 20% of Tech Startups Worth More Than $1 Billion Will Fail, Accel Says

3 months 1 week ago
An anonymous reader shares a report: There are more than 1,000 technology unicorns, meaning venture-backed companies worth $1 billion or more, but at least one in 5 are likely to fail, said Rich Wong, a partner at venture capital firm Accel Partners. "I think maybe out of that thousand, 20% fully die. The end," Wong said on Thursday at the Bloomberg Tech conference in San Francisco. The estimate reinforces what's become a grim calculus for many companies. Tech start-up valuations soared during the 2021 pandemic boom -- before crashing back to earth, as interest rates rose and venture capital investments fell. Of the companies that don't fail, about half will be stuck -- muddling along without being able to grow bigger or go public, Wong said. Some of those may "ultimately have reality set in," and sell themselves for lower prices than once seemed feasible. Others, not quite failing, "will be a bit zombie-ish and grind on," he said.

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