The Netherlands Authority for Consumers and Markets (ACM) ordered Apple Dec. 24 to adjust its App Store policies to allow dating app providers to be able to use payment systems other than Apple’s, according to a press release.
“Some app providers are dependent on Apple’s App Store, and Apple takes advantage of that dependency,” ACM Chairman of the Board Martijn Snoep said in the release. “Apple has special responsibilities because of its dominant position. … That is what we are forcing Apple to do with this order. Protecting people and businesses against abuse of market power in the digital economy is one of our most important duties.”
Read more: Apple Ordered to Open Payment Gates on Dutch Dating Apps
Apple charges app developers between 15% and 30% for any payment that users make using its in-app purchasing payment system, which is the only method of payment available in the App Store, so it is de facto, a mandatory payment. In the case of dating apps, if developers want to provide their services to Apple’s users, they need to accept Apple’s conditions regarding the App Store and the payment instruments. Then, if users pay for “superlikes” and “boosts” in the app, part of that payment goes to Apple.
In the ACM’s view, these conditions are unreasonable and in violation of competition rules. The initial order against Apple included not only the obligation to allow app developers to use other payments, but also periodic penalties of 5 million euros (about $5.7 million) per week in case the Cupertino company fails to comply with the decision in two months.
On the same day of the decision, Apple filed an injunction before the District Court to see this decision suspended. Yet, the court agreed with the ACM’s position that these conditions are abusive, and Apple has to allow dating app providers in the Dutch Store Front of the App Store to choose which payment systems they use to settle payments for digital content and services sold within the app, and they can choose payment systems outside the app for in-app purchases.
Nonetheless, the ACM’s order has been partially suspended for the moment, and the amount of the penalty that Apple would have to pay if it doesn’t comply with the decision has been reduced.
The regulator’s and the judge’s decisions are important because they confirm Apple’s dominant position in the App Store the “unreasonable” conditions imposed by mandating the use of the in-app purchasing payment system, according to the release.
While the financial impact of this case is negligible for Apple as this case affects only a few apps in The Netherlands, the ripple effect may have more consequences.
Apple doesn’t disclose the App Store revenue, but under the Services category, which includes App Store fees, Apple generated $68 billion in 2021, up from $53 billion in 2020. If other countries were to follow a similar approach to the ACM and compel Apple to allow third-party payments in the App Store, the financial impact on the company could be significant.
See also: Australia Mulls Regulation for Apple Pay, Google Pay, Other Big Tech Players
This scenario had seemed unrealistic a few years ago, but the company is involved in antitrust probes and policy debates around the world, and the likely result in many of these cases will be the adjustment of the App Store policies to the detriment of Apple.
The company is facing antitrust investigations in Europe for the same practices, and the bloc is likely to pass the Digital Markets Act in 2022, which will impose new conditions on the App Store.
South Korea recently passed a new law allowing users to use third-party payment solutions in Apple and Google app stores
In the U.S., District Judge Yvonne Gonzalez ordered Apple to allow developers to use alternative payments (although Apple won an injunction, and the effect of this order has been delayed until the appeal court rules on Epic versus Apple).
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