Dutch antitrust regulator penalties Apple for commission on in-app expenses

Dutch antitrust regulator penalties Apple for commission on in-app expenses

Apple was ordered to correct the payment policies of its App-store by the Authority for Consumers and Markets (ACM), the Netherlands' competition regulator, after the Dutch authority ruled on Friday that Apple's in-app payment policies violate the country's competition law.

According to the ACM, in 2019, it commenced an investigation to determine whether Apple's practices constituted an abuse of dominant position and eventually limited its scope to dating apps. App developers are required to pay US$99 annually to use the App Store, according to the ACM. The fee is paid only by around 85% of developers. The developer must comply with additional conditions if he wishes to offer paid features within the app. Apple deducts a portion of purchases made within the app. App developers may face such conditions in less than 15% of cases.

It was noted by the ACM that since most users own smartphones based on Android or iPhone, dating apps should be available both on the Google Play Store and the Apple App Store to maximize their reach. Apple's policies make iPhone dating apps highly dependent on Apple's policies, as they are available exclusively through the App Store. As a result, Apple's "unreasonable" conditions will have to be accepted by developers since they are disproportional to the additional payment and are violating the Dutch Competition Act since they do not appear to be necessary to open the App Store.

Chairman of the Board of the ACM, Martijn Snoep, said: "Apple reaps the benefits of some app providers' dependence on the App Store.". Because Apple holds such a dominant position, it has special responsibilities. It is important that Apple takes into account the interests of app developers too and sets reasonable conditions."

Accordingly, the ACM ordered Apple to "adjust the unreasonable conditions in its App Store that apply to companies that provide dating apps." If Apple failed to change the unreasonable conditions, it would be fined 5 million euros per week, up to a maximum of 50 million euros. Developers of dating apps will be able to choose a payment method freely for purchases made within their apps due to this decision.

In other jurisdictions, Apple has also been conflicted over app store commissions. It was reported in May 2021 that the European Commission had filed a complaint against Apple for charging 30 percent commission to music-streaming developers. A federal district court in the US has ordered a permanent injunction against Apple's commission policy for in-app payments, while in the US Apple is involved in ongoing litigation with Epic Games. It has banning in-app commission payments altogether by the dominant app store operators, which is the toughest measure yet.