Apple has been fined another €5 million in the Netherlands after the country’s antitrust watchdog said the tech giant is applying “unreasonable” conditions to local dating app providers which want to make use of non-Apple payment technology in their apps.
Apple’s total fine, including earlier penalties for failing to comply with the regulator’s order, now stands at €20 million.
The Autoriteit Consument & Markt (ACM) ordered Apple to provide local dating apps with the ability to make use of alternative payment tech for in-app purchases in August last year, after investigating a number of complaints. Although enforcement of the order was delayed until last month after Apple sought to challenge it in court.
After a ruling in December an initial mid-January deadline for Apple to comply with the ACM order came and went without the company being deemed to have fulfilled the requirements, leading to a penalty.
Every week since then the regulator has issued another fine — saying it is still not satisfied that Apple is complying with all the requirements.
In its response today the ACM specifies it is unhappy that Apple has created a costly technical burden for dating apps to adopt non-Apple payment tech.
“The adjusted conditions that Apple sets for dating app providers are unreasonable and create an unnecessary barrier,” the ACM said in a press release (translated from Dutch using machine translation) announcing its latest sanction.
“The new terms state that if they want to use an alternative payment system, dating app providers will have to create a brand new app from scratch. Apple has informed the ACM about this. App providers cannot modify their existing app.
“ACM believes that this is an unreasonable condition that conflicts with the requirements set by ACM. The ACM is of the opinion that Apple still does not meet the requirements of the ACM at this time.”
Apple’s fine over the ACM’s order could increase further — up to a maximum of €50 million — if the App Store controller continues to drag its feet on meeting the regulator’s demands.
As we reported earlier this month, Apple’s tactic in the face of an unwanted regulatory order has been to try to make it both difficult and unattractive for local developers to take up their “entitlement” to use alternative payment tech — such as by injecting extra technical overhead (like the requirement to submit a separate app binary); and by saying it will charge devs a fee on non-Apple processed transactions that is just 3% lower than Apple’s standard App Store commission.
It’s notable that the ACM has immediately slapped down Apple’s attempt to create a technical barrier to use of third party payment tech.
But it’s less clear whether Apple’s intent to levy an almost identical commission fee on apps that use third party payment tech rather than its in-app payments API will face regulatory push back or not.
We again asked the regulator for clarity over its position on the commission fee. However it told us it can only provide information about actions “where the judge has confirmed the order subject to penalty payment”.
Last time we asked about this the ACM also told us it was only able to refer to portion of the order the court upheld and cleared for publication — so it’s possible that element remains undecided by the court, or else it has just not been cleared by the court for publication.
In its statement today the ACM focused on calling out the “disadvantageous” burden that it says Apple’s customized terms for dating app providers create, writing:
In the amended terms and conditions, Apple sets a considerable number of requirements for dating app providers who want to use an alternative payment method. Dating app providers must, among other things, build a new app and offer it in the Apple App Store. The ACM considers this condition to be disadvantageous for dating app providers. Dating app providers who opt for an alternative payment system are thus forced to incur additional costs. And consumers who now use the app will have to switch to the new app before they can use the alternative payment method.
It will take app providers a lot of time and effort to properly inform consumers about this. Consumers must, among other things, delete their old app and install a new app. In addition, ACM also has reservations about a number of other parts of the amended conditions that Apple sets for dating app providers.
The regulator has ordered Apple to amend the conditions for access to the Dutch App Store for local dating app providers.
It has also reiterated that dating apps must be able to use other payment systems and Apple’s own in App Store payment system — rather than be forced by Apple to use either one or the other.
The deadline for Apple to comply is next Monday when the regulator will again decide whether to hit Apple with another €5M fine or not.
Apple was contacted for a response to the latest ACM enforcement but at the time of writing it had not responded.
The Dutch App Store showdown appears to have piqued the interest of a litigation funder — which is backing a push to bring a class action suit in the market and seeking compensation for consumers of both Apple and Google’s mobile app stores.
Local press in the Netherlands reported today on the launch of a foundation that’s been set up to press for collective action against the two tech giant over commissions charged to developers which it argues has led to a knock-on inflation in the price to consumers of digital content sold via the stores.
The not-for-profit foundation in question — which is soliciting for Dutch app store users to sign up to participate in its action via a website called Big Tech. Fair Play. — is funded by a third party that it says is “owned by funds and managed accounts ultimately managed by companies affiliated with Fortress Investment Group LLC”, aka the New York headquartered litigation financier that’s active in the Netherlands and elsewhere.
The increase in regional antitrust activity around big tech — combined with reputational knocks that have taken some of the shine off major platforms, whether around consumer privacy or operational issues like third party fees — does appear to be trickling down into more cash being made available for damages-seeking lawsuits. See also the class-action style competition suit launched in the U.K. last month against Facebook-owner Meta, for example, or the PriceRunner suit against Google announced this month.
Albeit, whether lawsuits seeking to press antitrust damages claims against dominant platforms will fair better than privacy class-action litigation, which can struggle to meet the required legal bar to define a class, remains to be seen.
Apple to charge 27% fee for Dutch dating apps using alternative payment options
Comment