Brussels accuses Apple of breaking EU rules
Newsflash: Brussels has accused Apple of restricting competition on its app store.
European commissioner Thierry Breton has announced that the EU will take action against Apple under its new digital regulations, the Digital Markets Act.
Posting on X, Breton says:
For too long Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.
Today we are taking further steps to ensure AppStore & iOS comply with the DMA.
“Act different” should be their new slogan🍏
For too long @Apple has been squeezing out innovative companies — denying consumers new opportunities & choices.
Today we are taking further steps to ensure AppStore & iOS comply with #DMA pic.twitter.com/e741oV9r9l
— Thierry Breton (@ThierryBreton) June 24, 2024
The EU are also investigating whether Apple’s developer fees breached the bloc’s rules, the Financial Times reports, adding:
As part of the new probe into developer fees, Brussels said it was looking at whether Apple was imposing too many restrictions for users to download and install alternative app stores.
Key events
Badenoch and Reynolds on leadership ambitions
The Bloomberg debate wrapped up with quick statements from the two protagonists.
Jonathan Reynolds goes first, saying businesses are facing too many serious challenges to risk another five years of a chaotic and unstable government.
“It’s time to return to a government that solves problems, rather than causing then”, he says, pledging to keep working with businesses after the election.
Kemi Badenoch says the difference between the two parties is that Labour want to bring in new laws that make it harder to hire staff, and to micro manage businesses.
Conservatives believe in capitalism, she pledges, the power of business to do good.
“We don’t think profit is a dirty word, and we are optimistic about our future,” Badenoch concludes.
And finally…
Q: Bloomberg turns to its guests’ leadership ambitions.
Jonathan Reynolds gets the giggles, turning red, before insisting he is “very much focused” on becoming the secretary state for business and trade.
Keir Starmer has done a “quite exceptional” job of turning Labour around, he adds.
Kemi Badenoch (who has been cited as a potential leader if the Conservatives are hammered in next month’s election) says the question was obviously meant for her (getting Reynolds guffawing).
Badenoch says she stood for the leadership before, and lost, and is now “terrified” at the prospect of Labour coming into power.
She insisted there was “no better job” than Business and Trade Secretary, which “is a lot easier and a lot less pressured than being prime minister”.
Q: Some cabinet ministers may lose their seats… would you be up for the leadership challenge if it came up?
Badenoch says leadership issues will be discussed after the election, not before….
That doesn’t exactly rule out a Badenoch bid… and appears to leave the door open for one….
Q: Should Thames Water be nationalised?
Kemi Badenoch says Thames Water is a “very, very difficult” situation; she doesn’t want to move markets by discussing nationalisation while it is going through difficulties.
Reminder: The Guardian reported in April that the government was considering radical plans to renationalise Thames Water, under which most of its £15.6bn debt would be added to the public purse.
The palava with Thames Water shows that the UK’s regulatory system is not working well, as the company tries to make a profit, keep bills low, and invest in infrastructure.
Jonathan Reynolds says people are unhappy about the state of the UK water industry.
Reynolds hopes that nationalisation can be avoided, pointing out that investment must involve losing as well as gaining money.
Reynolds: Shein London listing would help regulate company
Onto topical issues.
Q: Have you met with Shein, and would you put any restrictions if they chose to list in the UK [a decision which is moving closer…].
Jonathan Reynolds says Labour have met with Shein. Many people who are considering economic activity in the UK have spoken to Labour in recent years, he explains.
His view is that if companies are doing businesses in the UK, they should be regulated from the UK.
So, a listing would be the way to enforce the “highest standards” on, for example, the labour market, regulatory compliance, or tax.
Any listed company in the UK has a fairly significant set of compliance placed upon them.
If you are keen to see businesses operating to the highest standards, you should want to see them do that from the UK.
Kemi Badenoch, the current business and trade secretary, reveals she has NOT met with Shein.
She has two concerns with a potential Shein listing in London.
1) The way Shein ships individually packaged orders directly from Chinese warehouses to consumers’ homes, meaning they fall below the £135 threshold for import duty
“That could mean quite a lot lost in terms of taxes,” Badenoch says.
2) Concerns that Shein are using forced labor in Xinjiang.
Q: What’s your policy on money from the Middle East and China?
Jonathan Reynolds says Labour is extremely keen to bring in overseas investment.
The Gulf is an “obvious place to look for that” money, he says, while China brings different considerations in terms of national security.
Labour will hold an investment summit in its first 100 days of power, he says, and ‘make the case’ for investing in Britain.
Reynolds says many of Labour’s plans come from the “reasonable complaints” of businesses who said they considered investing in the UK, but were put off by the prime minister changing, or because they didn’t know the country’s plans post-2016 (the year of the Brexit vote).
Kemi Badenoch says the UK already has the largest foreign domestic investment of an European country.
Q: What will you do to help small businesses get paid on time?
Kemi Badenoch says it is “extraordinary” how larger corporations treat smaller firms in their supply chain. “We will look again” at more regulations to speed up payments, she pledges.
Jonathan Reynolds says Labour would force the audit committees of large public companies to say how quickly they pay their suppliers – that would address the power inbalance that allows them to leave small firms waiting for money….
Kemi Badenoch is then asked about why more trade deals haven’t been signed.
Badenoch says the US government is not signing any free trade deals at the moment, so the UK has been signing agreements with individual US states instead.
It has been “very difficult” negotiating with India, she adds; any deal with Delhi has to work for business.
Jonathan Reynolds says Labour will improve the UK’s relationship with the European Union – starting with it not being governed by the internal politics of the Conservative Party.
He says Labour will seek to reduce checks on food and agricultural products, and to improve the mutual recognition of professional qualifications.
Reynolds argues that ‘relitigating the arguments on the customs unions or the single markets would not provide the stability Britain needs.
Q: The EU say they’re open to negotiating a deal to ease border friction for fresh food, for example, but it must have a role for the European Court of Justice. Will you accept that?
Reynolds says Labour won’t give away its negotiating hand. But surely, if you don’t want lower food standards than the EU, you can remove some of the trade frictions and costs.
Kemi Badenoch says the Conservative government tried to strike such a deal, but the EU wouldn’t accept it. She insists the UK can’t accept oversight by the ECJ.
Onto Brexit!
Q: What is your top proposal to cut costs for businesses exporting to the EU?
Kemi Badenoch claims that it’s hard to tell the impact of Brexit, versus the impact of the pandemic.
But she insists that services exports have been “going gangbusters”, making the UK the 2nd largest services exporter, and the 4th largest exporter in the world.
“Those are facts”.
Well….. this thread from Sky News’s Ed Conway shows that the picture is not quite as rosy as that:
First thing to say is that the bare bones of the claim are certainly true.
Between 2021 and 2022 the UK did indeed rise from 7th in the league table of the world’s biggest exporters (counting both goods and services) to 4th.
We’ll get to why this happened in a moment. But still pic.twitter.com/jaZfDbHbsx— Ed Conway (@EdConwaySky) June 23, 2024
However here’s some (very) important context.
It’s not like the UK has only JUST hit fourth spot. In fact, it was in 4th place in 2020. And in 2015, 2014 and 2013.
Actually if you look at the modal average of our position in the past decade it was… fourth. pic.twitter.com/mKOsTe2Qtu— Ed Conway (@EdConwaySky) June 23, 2024
So that “leapfrogging” notion is wrong.
If anything the outlier here was 2021, where we dropped to the lowest position we’d EVER been in, going back two decades or so.
Raising the question: what happened? Forget leapfrogging – why did we drop down?
Brexit? Covid? Something else? pic.twitter.com/V3VlkjFLGy— Ed Conway (@EdConwaySky) June 23, 2024
Having looked into this, I can tell you at least part of the answer comes back to gold.
If u follow me you’ve prob already heard this, but UK trade figs are MASSIVELY distorted by flows of gold into & out of London vaults.
Film I made about this years ago https://t.co/Vgd3ONcNZQ— Ed Conway (@EdConwaySky) June 23, 2024
And gold flows have been a very big distortionary factor in UK trade post 2019. Just LOOK at how much of the total UK export figure since then has been gold: a LOT.
Even tho we don’t mine sizeable amounts of gold, it’s routinely been one of our biggest “exports” in recent years pic.twitter.com/SVP6sWfngY— Ed Conway (@EdConwaySky) June 23, 2024
Now, nearly every trade statistician agrees you should exclude gold from trade stats. After all, this is more of a financial transaction than a traded good.
The @ONS already excludes gold from most of its figs. More on this here: https://t.co/Ihz5gH6rY0— Ed Conway (@EdConwaySky) June 23, 2024
But those UNCTAD trade league tables don’t, as far as I can tell, exclude gold.
And this is relevant. Because look: in 2021 UK gold exports dropped a LOT. In 2022 they bounced back to the highest level ever, boosting TOTAL UK exports by a whopping 4% (that’s MASSIVE). pic.twitter.com/GAPDjsETGJ— Ed Conway (@EdConwaySky) June 23, 2024
Raising the question, what does our trade picture look like if you EXCLUDE gold.
Are we still in fourth place?
In short: no.
Look, ex gold, our ranking would have been 6th last year. Not 4th.
In fact we wouldn’t have hit 6th since 2015. Which is consistent with other datapoints. pic.twitter.com/POeOJU04pf— Ed Conway (@EdConwaySky) June 23, 2024
Reynolds: Need to escape low-growth, high-tax, poor-services doom loop
Next issue – fiscal issues, and the IMF’s warning that both major parties’ manifestos are too opaque and lack detail on tax and spend.
Q: They say voters will be voting in a knowledge vacuum….
Kemi Badenoch says she “completely disagrees” with IFS’s assessment.
The truth is that people are not placing their votes based on the IFS’s analysis, but actually base it on what a party believes in, and what its values are.
She says the mini-budget showed the problems of cutting tax without cutting spending.
We are the party of sound money, of business, Badenoch promises.
Jonathan Reynolds says he respects the IFS…. and agrees that the Conservatives record speaks for itself (!).
Taxes are at a record high, and public services don’t reflect that tax burden.
The key is to break out of this low-growth, high-tax, poor-services doom loop, Reynolds says – and that’s Labour’s plan.
He says the UK would have billions of pounds more, if the economy had grown at the rate of the last Labour government.
Q: Are you ready to fight interest groups which won’t like the planning changes you have in mind?
Reynolds says that’s why Labour needs a mandate, so it can build the homes and infrastructure Britain needs.
Kemi Badenoch disputes this claim, pointing out that Labour members of the House of Lords had blocked the government’s attempts to remove nutrient neutrality rules, and free up housebuilding.
Reynoldsd defends Labour’s plans for workers rights
Next, a question on Labour’s plans for more protection against unfair dismissal, and ending zero-hours contracts.
Q: Is a Labour government going to make life much harder for small businesses?
Jonathan Reynolds says Labour’s manifesto is “a pro-worker, pro-business” agenda, that – he says – has been developed closely with businesses.
That includes a better business environment, changes to planning rules, certainty on tax, that will deliver more growth.
Reynolds adds that “The floor will rise”, but insists the vast majority of businesses are already operating at a much higher level than this new, higher floor already.
Kemi Badenoch hits back, saying it’s businesses don’t want these measures. She claims it’s “unbelievable” that Reynolds claims these new regulations have been developed with businesses.
She insists:
Businesss is terrified of what Labour is selling.
Badenoch says Labour’s plans for employment rights from day one are unpopular, and that the CEOs of Asda, Currys [see here] and M&S have said these are “terrible regulations”.
Reynolds returns fire, saying that the Conservative Party promised an employment bill after Brexit, and security in the workplace, and hasn’t delivered on it.
Labour, he says, will create a better working environment, one where people have secure work they can build a family round.
Badenoch won’t accept this, telling business leaders they should be “absolutely terrified” of “surrendering” your business, the economy, and tax, to Labour.
Badenoch argues that Labour are “fishing in an empty barrel”, and that flexible working rights are not the cause of problems in the UK economy.
Jonathan Reynolds agrees that governments must change their plans when circumstances change…
…and blames Liz Truss’s “disastrous mini-budget” for forcing Labour to drop its £28bn green investment plans.
He then returns to his criticism of Rishi Sunak’s climate u-turn speech last September, in which the PM pushed back the deadline for selling new petrol and diesel cars and the phasing out of gas boilers.
That was a “short-lived relaunch of the Rishi Sunak premiership”, Reynolds says, to pitch the PM as a change candidate.
Badenoch: So many difficulties with US election candidates
Kemi Badenoch then explains that governments respond to changing circumstances and instability – citing elections in Europe, and across the Atlantic.
In an apparent criticism of both Donald Trump and Joe Biden, Badenoch declares:
Look at what is happening in the US – we don’t even want to talk about the candidates that they’ve got for election, so many difficulties.
This uncertainty is all over the world, and we have managed to keep our economy growing.
[er, there was a shallow recession last year….]
The point about net zero, Badenoch adds, is that it can be an opportunity, but other things need to be delivered too, on a “no regrets” basis.
