In October 2021, the Dutch Authority for Consumers and Markets (ACM) found that tech giant Apple’s rules on the App Store are anti-competitive as it forced software developers to use its in-app payment system. Apple’s App Store payment policy requires app developers to use its payment system where commissions range between 15 to 30 per cent.
On December 24, 2021, ACM ordered the tech giant to adjust the ‘unreasonable conditions’ in its App Store that apply to dating-app providers. Currently, dating-app providers are not able to freely choose a payment system for purchases made in their apps.
The ACM wants Apple to offer third-party payment systems – other than Apple’s – to the Dutch App Store for dating-app providers. However, legal documents indicate that Apple plans to collect fees despite allowing apps distributed on the App Store to use third-party payment systems.
Dating apps and the issue?
Many dating services in the Dutch market offer their services to consumers through Google Play Store or Apple’s App Store as most users own Android or iOS smartphones. And in order to reach their customer base, dating apps make sure to have the availability of their apps on both of these stores.
For iPhone users, dating apps can only be offered through the App Store, which makes dating-app providers highly dependent on Apple. This means dating-app providers have little choice but to accept Apple’s conditions.
App providers pay $99 each year for using the App Store and almost 85 per cent of app providers pay only this fee. These are small businesses, but also major companies such as Amazon, Booking, or Uber. If an app provider wishes to offer paid services or subscriptions within its app (like dating apps), Apple imposes additional conditions. This situation applies to slightly over 15 per cent of all app providers.
Thus, the ACM opinionated that these conditions are not proportional to the additional payment service. Furthermore, the conditions are not necessary for running the App Store. That is why ACM considers these conditions to be unreasonable and in violation of competition rules.
The digital economy is a key topic on ACM’s Agenda. People and businesses must be protected against online misleading practices and market power. In order to tackle abuses of dominant positions, ACM conducts investigations and is able to impose sanctions on businesses, including fines and orders subject to periodic penalty payments.
Consequences Apple could face
According to a statement, the Dutch Authority for Consumers and Markets has provided two months’ time to Apple to adjust the unreasonable conditions. Otherwise, the tech giant will have to pay a periodic penalty of €5M per week up to a maximum of €50M.
Martijn Snoep, Chairman of the Board of ACM, explains, “Some app providers are dependent on Apple’s App Store, and Apple takes advantage of that dependency. Apple has special responsibilities because of its dominant position. That is why Apple needs to take seriously the interests of app providers too and set reasonable conditions. 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.”
