The Netherlands’ antitrust watchdog, the Authority for Consumers and Markets (ACM), said today (via Reuters) that Apple will allow its customers to pay for various Dutch dating apps by using different payment options embedded in such apps putting an end to a dispute that left Apple on the hook for $52.58 million in fines.
As many of you know, Apple demands that in-app payments for App Store transactions be made using Apple’s own in-app payment platform allowing the company to take out a cut of 15% to 30% of the transaction’s valuation. Third-party and alternative payment platforms are not allowed and any developer that offers links to alternative payment options faces expulsion from the App Store.
Apple rang up fines in the Netherlands totaling $52.58 million
That is what happened last year when mobile gaming developer Epic tried to promote its own payment platform for its popular Fortnite game which would have resulted in players paying less for in-game currency. Apple reacted by kicking Epic and the Fortnite game out of the App Store. And in the Netherlands, Apple’s failure to allow consumers to pay for dating apps using alternative payment methods resulted in Apple getting fined weekly.
Epic offered its own in-app payment platform for Fortnite users so they could bypass Apple’s cut of in-app payments
Apple claimed that it was complying with the demands of the Dutch watchdog agency and should not be fined. However, the tech giant’s solution was to force developers of Dutch dating apps to release separate versions of their apps for the U.S. and the Netherlands. This way, Apple could continue to collect its 15% to 30% cut on dating apps installed by its customers in the United States while allowing those in the Netherlands to pay using analternative payment platform.
The ACM claims that this solution created an “unnecessary barrier.” On the other hand, Apple said that with its plan, “it will comply with its legal obligations in the Netherlands while at the same time having the ability to maintain its standard terms and conditions in the rest of the world.”
In a statement, the ACM (via Reuters) said, “Apple has changed its unfair conditions, and will now allow different methods of payment in Dutch dating apps. With this concession, Apple will meet the requirements that the Netherlands Authority for Consumers and Markets (ACM) set under European and Dutch competition rules. Until recently, customers of dating apps had only been able to pay using the payment method that Apple imposed.”
The statement goes on to say, “In ACM’s opinion, Apple abused its dominant position with those practices. From now on, dating-app providers are able to let their customers pay in different ways. ACM forced these changes by imposing an order subject to periodic penalty payments. In the end, the sum of all penalty payments totaled 50 million euros.”
Dating app developers in the Netherlands will still pay Apple 27% of the value of an in-app transaction
Martijn Snoep, Chairman of the Board of ACM, said, “We want everyone to be able to reap the benefits of the digital economy. In the digital economy, powerful companies have a special responsibility to keep the market fair and open. Apple avoided that responsibility, and abused its dominant position vis-à-vis dating-app providers. We are glad that Apple has finally brought its conditions in line with European and Dutch competition rules. That offers app providers more opportunities to compete. And consumers will ultimately reap the benefits, too.”
Under the new rules imposed by Apple, dating app developers will still have to pay Apple a commission for purchases made outside of its App Store payment platform albeit with a slight discount. Those who were paying Apple 30% of the value of an in-app transaction related to a dating app will now pay it 27%.
Apple released a statement today that says, “We don’t believe some of these changes are in the best interests of our users’ privacy or data security. As we’ve previously said, we disagree with the ACM’s original order and are appealing it.”