Finance

ACM: Apple must adjust ‘unreasonable’ App Store terms

Like other app makers, dating app providers are required to use Apple’s payment system in their apps for iPhone and iPad. According to the Netherlands Authority for Consumers & Markets, Apple is ‘abusing’ its ‘dominant position’.

If Apple does not adjust the conditions of the App Store, the iPhone maker in the Netherlands can receive a penalty of 5 million euros per week, the ACM has just announced. The maximum fine can be up to 50 million euros. Due to the holiday season, Apple has until January 15 to implement the changes.

Other payment systems

According to the regulator, the makers of dating apps should be given the opportunity to offer other payment systems. They must also be able to refer users to external payment options outside the app in their app. Apple currently prohibits that as well.

“Apple must take the interests of app providers seriously and work with reasonable conditions. We are now enforcing that,” says ACM chairman of the board Martijn Snoep. According to the regulator, the conditions of the App Store are “disproportionate to the additional payment service provided”. According to the ACM, they are also ‘not necessary for maintaining the App Store’.

International impact

According to Snoep, the adjusted conditions can ensure that app makers incur less costs. “That in turn is passed on to consumers in the form of better products or lower prices for apps,” says Snoep to RTL Z.

According to him, the decision of the ACM can be followed internationally. Regulators in multiple countries, including France, the US and the UK, are also investigating the Apple App Store.

In higher appeal

Apple has appealed the ACM decision. “Apple does not have a dominant position in the software distribution market in the Netherlands,” the company said in a response.

Apple further points to the investments it is making “to help dating app developers reach customers and thrive in the App Store.” The company also believes that, given current EU and Dutch legislation, it has the right to charge app developers.

Apple points out that many app makers have had to pay ‘only’ 15 percent commission on purchases in their apps since the end of last year. Only apps that generate more than $1 million in annual revenue pay a 30 percent commission.

Apple pulled out all the stops

The ACM’s judgment dates back to August, but has only now been made public. This was because Apple demanded in the preliminary relief judge that ACM would not publish the decision.

In summary proceedings, the court of Rotterdam ruled that part of the order subject to penalty must remain secret. ACM may only disclose this part after the regulator has decided on Apple’s objections. “Apple pulled out all the stops to prevent us from going public with this decision,” said Snoep.

Lawsuit with Fortnite maker

The American judge ruled in September in the lawsuit filed by Fortnite maker Epic Games that Apple must allow other payment methods in the App Store. However, Apple continues to vehemently oppose that verdict and has recently been granted a postponement by the judge. There is also a lawsuit between Epic Games and Google about the terms of the Play Store.

The issues surrounding the app stores add to the discontent among politicians in the US and the EU over the power of big tech companies, also known as ‘Big Tech’. In the meantime, work is underway in several countries on stricter rules for app stores.

South Korea already passed a law this year requiring tech companies to allow payments through third parties. Microsoft has recently stopped asking a commission from software makers in its app store if they use their own payment systems.

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