- Silicon Valley’s greatest foe, Margrethe Vestager, has revealed her next target.
- The European Union’s competition commissioner wants to investigate the lack of standardization among phone chargers.
- The review has potential to spell trouble for Apple, as its proprietary Lightning connector is an obvious outlier in the market.
Silicon Valley’s enemy number one, Margrethe Vestager, has revealed her next target – and it’s bad news for Apple.
The European Union’s competition commissioner is a genuine thorn in the side of US tech giants, patrolling and enforcing antitrust laws with a vigour that last month saw her slap Google with a record $US5 billion fine.
Now the dust is settling on the EU’s action against Google for exploiting the dominance of Android, Vestager is casting around for her next tech project. And we got a big clue about what it is this week.
In a written answer to a question from an EU lawmaker, Vestager said her team is about to launch a review of smartphone chargers, amid concerns that tech firms have not acted on a promise to standardize charging points.
Apple, Samsung, Huawei, and Nokia were among 14 companies to sign a voluntary deal in 2009, agreeing to harmonize chargers for new models of smartphones coming into the market in 2011.
Vestager said progress against this aim had not been good enough. “Given the unsatisfactory progress with this voluntary approach, the Commission will shortly launch an impact assessment study to evaluate costs and benefits of different other options,” she said.
This could spell all sorts of trouble for Apple. Android phones use either USB-C and micro-USB connectors into the handset, and Apple’s proprietary Lightning connector is something of an outlier. This may make it an obvious target for Vestager’s investigation.
The competition commissioner has shown an appetite to pursue Apple in the past, ordering Tim Cook’s company to pay back €13 billion ($US15 billion) in taxes to Ireland in 2016.The charger issue strikes at the heart of Apple’s unique technology, and threatens a significant source of revenue for the company.
Apple replaced its 30-pin connector with Lightning in 2012. Estimates at the time suggested that Apple could make as much as $US100 million from the switch.
And that was before Lightning evolved to provide the dual function of charger and headphone jack. This means Apple customers have to pay for Apple headphones (or other Apple-linked brands like Beats) or buy an adaptor if they lose the free one provided with the phone, allowing compatibility with a 3.5 mm headphone jack.
Then there’s the money Apple makes from replacements and repairs. When the company hit its historic trillion-dollar valuation last week, the below tweet about chargers went viral:
Why Apple is worth $1 trillion pic.twitter.com/LuO4Tz5aKF
— sophia (@SophiaCannon) August 3, 2018
A simple explanation for this is that the tweet resonated with Apple users. And indeed, the replies are busy with others commenting and sharing pictures of their own tales of woe about Lightning charger.
Then you get on to repairs, which often can only be done at an Apple store, where a premium is charged for the company’s services. The firm offers customer repair plans under AppleCare, which sits under its services division, where revenues exploded 31% to $US9.5 billion in the three months to June.
Apple is yet to respond to Business Insider’s request for comment, but the company is unlikely to welcome the EU’s interest in phone chargers.
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