Dutch regulators near antitrust decision in Apple investigation

Posted:
in General Discussion
Authorities in the Netherlands say they are close to a draft decision over allegations that Apple's App Store in-app payment system is anti-competitive.




Close to two years after it began investigating the App Store, the Netherlands Authority for Consumer and Markets (ACM) has told developers that it is close to publishing a draft conclusion.

According to Reuters, the Dutch authorities said this in a letter sent to an unknown number of developers involved in the case. As described to Reuters by two developers, the confidential letter does not indicate when a decision would be published, nor what it would be.

Apple is currently the subject of multiple antitrust investigations regarding the App Store. According to Reuters, the Netherlands could now become the first to rule.

In ACM's case, the focus was on the in-app payment system and how Apple charges commissions of between 15% and 30%. Speaking at the start of the investigation in 2019, then-ACM board member Henk Don said that the authority had received multiple complaints.

"To a large degree, app providers depend on Apple and Google for offering apps to users," he said. "ACM has received indications from app providers, which seem to indicate that Apple abuses its position in the App Store. That is why ACM sees sufficient reason for launching a follow-up investigation, on the basis of competition law."

Separately, the same Dutch authorities have subsequently begun an antitrust investigation into technology firms which limit access to NFC services in phones. Apple was not named in the initial description of this investigation, but it appears to follow criticism of how the company refuses to allow competitors access to its Apple Pay system.

Comments

  • Reply 1 of 10
    rob53rob53 Posts: 2,461member
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    viclauyycFileMakerFellerwatto_cobra
  • Reply 2 of 10
    lkrupplkrupp Posts: 8,878member
    If Apple cannot generate revenue from the App Store then what is the business motivation for having it? Is the App Store to be regulated into a free service for developers that Apple is required to provide and lose money on? Apple gets nothing for its efforts? It certainly looks that way. You know it wasn’t that long ago that developers had to fend for themselves and do all of the marketing and rely on word of mouth to get traction for their softwares. How many small time developers went belly up because they didn’t have the resources to promote their products?
    watto_cobra
  • Reply 3 of 10
    avon b7avon b7 Posts: 5,586member
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users. 

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 
    muthuk_vanalingam
  • Reply 4 of 10
    avon b7 said:
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users. 

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 
    - You have to be dumber than a brick to not understand how the app stores work.
    - Would you expect to be able to pay Walmart through Target’s payment system?
    - Would you expect Walmart to whine about how Costco won’t let them sell items in their store, and use their own payment system?
    - Are store brand products now anti-competitive, after decades of it being just fine? (You could argue that all stores originally had nothing but store brand — there were very few third party brands, historically.)
    - Allowing competitors to undercut another company’s business model is anticompetitive… this is exactly the kind of thing that other companies use to gain leverage and dump subsidized products into a given market to weaken competition.
    - Buying an Android as an alternative is perfectly valid. It’s the same market. No one buys a Ford or a Leica and expects to reuse all the purpose built items they bought on another car or camera (and that could very easily be enforced — but it’s not).

    And that’s the point — just because you can enforce interoperability doesn’t mean you should. Some things can easily do that, and it’s in it’s design and market to do so. For other things, it breaks the nature and purpose of the design or function, rendering it useless and enforcing mediocrity.

    btw - I’d also like to live in the house you built, but not pay rent or a mortgage, because other property owners subsidize their units with advertising. That seems fair, right? Also, I’m going to sublet and keep all the income.

    Rayz2016mjtomlinviclauyycwatto_cobra
  • Reply 5 of 10
    mjtomlinmjtomlin Posts: 2,410member
    avon b7 said:
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 

    And right there is where this issue falls apart. If you're shopping in Costco you have to do so by their rules, if you don't like it, go somewhere else and shop. So, it is the same, because if I like Costco's brand, I cannot go to another store and buy that brand, I'm stuck shopping at Costco and have to abide by their rules and whatever payment system they chose to use. So if they only accept a Costco card, you have to sign up for and pay with their card. Just as if you choose to buy an iPhone, you have to install apps via the method that iPhone provides, if you don't like it, you can return it and buy a different device.

    The bigger question here is, can hardware OEM’s be forced into making devices they don’t want to make? The answer is, no. Apple is well within their right to disallow the installation of 3rd party software altogether. Just as they are to restrict how 3rd party software is installed on their devices. Or if they so chose to, allow installation of apps from anywhere.

    Furthermore, most users don't care that they can only download from the AppStore. The only people who complain about it are the ones who know well beforehand that the iPhone restricts downloads from a single source.... and of course some developers, who also know how the AppStore works before they accept the developer agreement.
    edited February 26 watto_cobra
  • Reply 6 of 10
    avon b7avon b7 Posts: 5,586member
    mjtomlin said:
    avon b7 said:
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 

    And right there is where this issue falls apart. If you're shopping in Costco you have to do so by their rules, if you don't like it, go somewhere else and shop. So, it is the same, because if I like Costco's brand, I cannot go to another store and buy that brand, I'm stuck shopping at Costco and have to abide by their rules and whatever payment system they chose to use. So if they only accept a Costco card, you have to sign up for and pay with their card. Just as if you choose to buy an iPhone, you have to install apps via the method that iPhone provides, if you don't like it, you can return it and buy a different device.

    The bigger question here is, can hardware OEM’s be forced into making devices they don’t want to make? The answer is, no. Apple is well within their right to disallow the installation of 3rd party software altogether. Just as they are to restrict how 3rd party software is installed on their devices. Or if they so chose to, allow installation of apps from anywhere.

    Furthermore, most users don't care that they can only download from the AppStore. The only people who complain about it are the ones who know well beforehand that the iPhone restricts downloads from a single source.... and of course some developers, who also know how the AppStore works before they accept the developer agreement.
    That's completely different. 

    Even if you like Costco's brand and they won't sell you anything else, you can still walk out the store and go somewhere else and, and this us the important aspect, you knew that before you entered and you lose nothing by walking out (even if you want to remain)

    That's a huge difference. With Apple you have the added issue of 'paid entry'. A financial outlay to even get access to the store. 

    The key IMO will be how Apple makes customers aware of the restrictions. If they were upfront about them and customers were clearly and concisely informed of them, there night not be a problem. 

    That isn't the case today, though. 
    elijahgmuthuk_vanalingam
  • Reply 7 of 10
    elijahgelijahg Posts: 1,966member
    lkrupp said:
    If Apple cannot generate revenue from the App Store then what is the business motivation for having it? Is the App Store to be regulated into a free service for developers that Apple is required to provide and lose money on? Apple gets nothing for its efforts? It certainly looks that way. You know it wasn’t that long ago that developers had to fend for themselves and do all of the marketing and rely on word of mouth to get traction for their softwares. How many small time developers went belly up because they didn’t have the resources to promote their products?
    Years ago Apple claimed the App Store was not intended to generate a profit, only cover its running costs; it was intended to sell more hardware. Now that the cost of Apple hardware is such that it has reached saturation with those willing to bear the cost, Cook is well aware Apple needs other means to continue to increase profits - because lowing prices to increase sales and thus ultimately profit, is the antithesis of Cook's existence.
  • Reply 8 of 10
    elijahgelijahg Posts: 1,966member

    avon b7 said:
    mjtomlin said:
    avon b7 said:
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 

    And right there is where this issue falls apart. If you're shopping in Costco you have to do so by their rules, if you don't like it, go somewhere else and shop. So, it is the same, because if I like Costco's brand, I cannot go to another store and buy that brand, I'm stuck shopping at Costco and have to abide by their rules and whatever payment system they chose to use. So if they only accept a Costco card, you have to sign up for and pay with their card. Just as if you choose to buy an iPhone, you have to install apps via the method that iPhone provides, if you don't like it, you can return it and buy a different device.

    The bigger question here is, can hardware OEM’s be forced into making devices they don’t want to make? The answer is, no. Apple is well within their right to disallow the installation of 3rd party software altogether. Just as they are to restrict how 3rd party software is installed on their devices. Or if they so chose to, allow installation of apps from anywhere.

    Furthermore, most users don't care that they can only download from the AppStore. The only people who complain about it are the ones who know well beforehand that the iPhone restricts downloads from a single source.... and of course some developers, who also know how the AppStore works before they accept the developer agreement.
    That's completely different. 

    Even if you like Costco's brand and they won't sell you anything else, you can still walk out the store and go somewhere else and, and this us the important aspect, you knew that before you entered and you lose nothing by walking out (even if you want to remain)

    That's a huge difference. With Apple you have the added issue of 'paid entry'. A financial outlay to even get access to the store. 

    The key IMO will be how Apple makes customers aware of the restrictions. If they were upfront about them and customers were clearly and concisely informed of them, there night not be a problem. 

    That isn't the case today, though. 
    Precisely. Once you're in, you're already invested and won't want to leave. You agree to the terms when you enter the shop and stay there because the shop guarantees all the products do what they say on the box. That's fine, and as time goes on you buy Costco-only products (coffee machines, tea maker, whatever), for which supplies (coffee, milk, tea) are only available at Costco. But then the store starts arbitrarily changing the rules and banning the type of coffee you liked at a whim, so now you can't use the same coffee anymore, and you can't get the same coffee elsewhere because only Costco brand coffee works with your Costco coffee machine. You can buy similar supplies elsewhere, but to use them means you have to write off the initial cost of getting access to Costco, and bin the coffee/tea/whatever machines and buy ones from someone else instead.

    If there were other stores which could sell supplies that are compatible with Costco products (see lawsuits around Epson vs compatible cartridge manufacturers, Epson lost) it wouldn't matter if Costco dropped the products, they're available elsewhere. If those products somehow damage the Costco device, that's on the customer.

    This lock-in with Apple being the sole arbitrator of what's allowed is what the anticompetitive investigations are targeting, fanatics here seem to think just switching to Android if you want an app that has been dropped is trivial and zero cost. But it is obviously not.
    edited February 27 avon b7
  • Reply 9 of 10
    elijahg said:
    If there were other stores which could sell supplies that are compatible with Costco products (see lawsuits around Epson vs compatible cartridge manufacturers, Epson lost) it wouldn't matter if Costco dropped the products, they're available elsewhere. If those products somehow damage the Costco device, that's on the customer. 

    This lock-in with Apple being the sole arbitrator of what's allowed is what the anticompetitive investigations are targeting, fanatics here seem to think just switching to Android if you want an app that has been dropped is trivial and zero cost. But it is obviously not.
    cf web apps. Apple even provides some automation (admittedly limited) to let you launch a particular site from an icon on your home screen, so it looks like an app but it launches in your browser instead.

    The problem with web apps is that they're not able to be feature-compatible with native apps because the browsers are not exposing (for good reasons!) all of the native functionality of the underlying platform. So from that perspective, you can't build a "compatible printer cartridge" that is a 100% match and legally... yeah, you can argue that's anti-competitive.

    But there can be mitigating circumstances. The consequence of your argument for iOS apps is that Apple would be forced to license its IP and services at a price determined by some other entity. This can be acceptable in some situations, but because it's violating the laws around property ownership there needs to be a high bar cleared before such an approach gets instituted. Given that a web app can do ~90% of what a native app can do in most cases, I personally am not sympathetic to the claims being made.

    The vast majority of these complaints seem to come from an assumption that the software being created (or service being offered) is valuable enough to support its creators financially, if only there weren't these darned costs being incurred on the revenue stream, costs that could be reduced by switching to an alternative payment system that of course won't have any flow-on effects - which these people know because they have such great business acumen that they're coding apps in their spare time around their real job.

    News flash: just because you enjoy doing something, and you think you've come up with something neat, it doesn't mean it's going to be financially viable the way you imagined it. A lot of effort goes into making something successful, and often the cost of financial success includes changing your creation into something you don't like and learning how to operate a business in a very competitive environment.
    watto_cobra
  • Reply 10 of 10
    davidwdavidw Posts: 1,130member
    elijahg said:

    avon b7 said:
    mjtomlin said:
    avon b7 said:
    rob53 said:
    I wonder if Costco is being investigated because they only allow their own gift card or Visa cards, not Amex (anymore), MasterCard, or Discover. Isn't this the same thing? Costco has a contract with Visa and only Visa (Visa controls all cards distributed by banks and other financial institutions, they are all Visa cards). Isn't this payment system anti-competitive? This type of payment process happens all over the place so why would, in this case the Dutch, any country only go after Apple for providing a single payment system when other companies do the same thing? Oh, wait, because they want a cut of Apple's money, that's why.
    It's not the same thing. 

    If you don't like Costco rules, you can shop elsewhere. 

    That option isn't open to iPhone users

    Saying that consumers can choose an Android device isn't valid IMO because the situation we are touching on (in general, not the Dutch case per se) is not made clear to users prior to purchase.

    Now, if it were made available in clear and concise terms to users, that might change things from a regulatory perspective. 

    And right there is where this issue falls apart. If you're shopping in Costco you have to do so by their rules, if you don't like it, go somewhere else and shop. So, it is the same, because if I like Costco's brand, I cannot go to another store and buy that brand, I'm stuck shopping at Costco and have to abide by their rules and whatever payment system they chose to use. So if they only accept a Costco card, you have to sign up for and pay with their card. Just as if you choose to buy an iPhone, you have to install apps via the method that iPhone provides, if you don't like it, you can return it and buy a different device.

    The bigger question here is, can hardware OEM’s be forced into making devices they don’t want to make? The answer is, no. Apple is well within their right to disallow the installation of 3rd party software altogether. Just as they are to restrict how 3rd party software is installed on their devices. Or if they so chose to, allow installation of apps from anywhere.

    Furthermore, most users don't care that they can only download from the AppStore. The only people who complain about it are the ones who know well beforehand that the iPhone restricts downloads from a single source.... and of course some developers, who also know how the AppStore works before they accept the developer agreement.
    That's completely different. 

    Even if you like Costco's brand and they won't sell you anything else, you can still walk out the store and go somewhere else and, and this us the important aspect, you knew that before you entered and you lose nothing by walking out (even if you want to remain)

    That's a huge difference. With Apple you have the added issue of 'paid entry'. A financial outlay to even get access to the store. 

    The key IMO will be how Apple makes customers aware of the restrictions. If they were upfront about them and customers were clearly and concisely informed of them, there night not be a problem. 

    That isn't the case today, though. 
    Precisely. Once you're in, you're already invested and won't want to leave. You agree to the terms when you enter the shop and stay there because the shop guarantees all the products do what they say on the box. That's fine, and as time goes on you buy Costco-only products (coffee machines, tea maker, whatever), for which supplies (coffee, milk, tea) are only available at Costco. But then the store starts arbitrarily changing the rules and banning the type of coffee you liked at a whim, so now you can't use the same coffee anymore, and you can't get the same coffee elsewhere because only Costco brand coffee works with your Costco coffee machine. You can buy similar supplies elsewhere, but to use them means you have to write off the initial cost of getting access to Costco, and bin the coffee/tea/whatever machines and buy ones from someone else instead.

    If there were other stores which could sell supplies that are compatible with Costco products (see lawsuits around Epson vs compatible cartridge manufacturers, Epson lost) it wouldn't matter if Costco dropped the products, they're available elsewhere. If those products somehow damage the Costco device, that's on the customer.

    This lock-in with Apple being the sole arbitrator of what's allowed is what the anticompetitive investigations are targeting, fanatics here seem to think just switching to Android if you want an app that has been dropped is trivial and zero cost. But it is obviously not.
    There's a big difference with anti-trust, between you don't want to leave and you can't leave. 

    Verizon uses CDMA, once you invest in an expensive mobile device that is CDMA only, you don't want to leave. But that is not the same as you can't leave and switch to GSM if you had to. And the cost would not be trivial. Nothing locks you into Verizon and CDMA. You not wanting to leave is not a lock in. (Though at one time in the US, there were places that had poor or unreliable or non-existing service, by one network or the other. And many consumers that traveled, had a CDMA phone and a GMS phone, because CDMA was (are?) more popular overseas.) 

    This is not like Microsoft with Windows. Microsoft Windows is on over 90% of the World computers, in both homes and businesses. There were many software that businesses and consumers had to use, that was only available in Windows. There was a true barrier there, that prevented consumers, businesses and developers from leaving Windows. Even if one uses a Mac at home, they might still be require to own a Windows PC for work. Microsoft has a real monopoly with Windows. Not one where someone carved out selected consumers and calls it a "market".   

    There's hardly anything in the Apple Apple Store that is not available in the Google Play Store. Just because an iOS user can not get certain apps that are available in the Google Play Store or over the internet, nothing is preventing an iDevice user from switching to Android. Cost is not an issue. Choice is. 

    You citing cost as a barrier doesn't hold water. It is not like with Windows. Every 2 to 4 years, the average consumer buys a new (or newer used one) mobile device. Nothing is preventing them from switching at that time, at what would be considered at a non trivial cost. All mobile devices sellers will help move whatever data can be move from iOS to Android or vice versa.

    Even apps will eventually stop working on devices as the OS gets updated and the developer doesn't provide an upgrade. Or if one must use the newest version of an app that is not available for their device that can't run any newer OS. The cost to buy a new mobile device because the developer no longer supports the last OS on the device is not trivial. Yet, consumers do it, if it's that important for them to use that app.

    There are apps that the developers only have in iOS or Android. If the consumer need to use that app, then they need to buy or switch to the mobile device that runs it. Do we blame developers for only supporting one mobile OS because the cost of  having to switch mobile devices to run their app, is not trivial? Do we force developers to develop for all platforms, so consumers don't have to bear the cost of switching devices, if they need to run their software? Should Apple be forced to allow iDevices to download apps off the internet, to accommodate developers that only want to make their software available on the internet. In the business world, the cost to have their software available in the Apple App Store, is trivial. 

    I just paid Mercedes $750 for two keys (yes two) for my wife's 1999 Mercedes sedan. ($200 per key and $350 for programing. If I were to buy them at separate times, it would be $550 per key.) The only place to get a replacement or an extra key for a Mercedes that works, is from a Mercedes dealer. And you need to have the key, show ID and auto registration. And they don't keep any keys in stock. They have to order the key from Mercedes and it might only be in stock in Germany.

    Mercedes uses proprietary software with the chip in their car keys. One can not bring their Mercedes key to any locksmith or a Home Depot and have a duplicate made. Mercedes keys can not be re-programed to work on another Mercedes. Keys are mated for life, for the Mercedes they were originally programed for. I have never heard of Mercedes losing any lawsuit due to this lock in. The "monopoly" Mercedes has with Mercedes car owners, is not a real monopoly.

    There is nothing that prevents me from selling the car and buying another car from another manufacturer. The cost will not be trivial. But it's still my choice to keep the Mercedes. Hell, my wife only paid $800 for it, from a friend. But it only came with one key. And if she lost that key or the key is damaged and stop working, the Mercedes would need be towed to the Mercedes dealer, so they can make a new key, as they need the proprietary software program that is in the car computer, to do it. All this to keep a Mercedes secure from auto thieves. And yet, I knew of this lock in and still let my wife purchase another Mercedes. A used SUV from a dealer this time. But I made sure the dealer supplied more than 2 keys.  

    The first thing I do when buying any printer is to check how much the ink or toner cost. If they are only available from the maker and are expensive, I choose another printer. Even if that choice might be from the same maker. I don't buy a printer, new or used, and then cry about how expensive it is to supply it with ink or toner.     
    watto_cobra
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