Apple fined $5.6M for failing to meet Dutch dating app order
Apple has not done enough to appease a regulator's order concerning App Store payment rules affecting dating apps in the Netherlands, a decision that has now cost the company 5 million euros.
On January 15, Apple confirmed it would abide by an order by the Netherlands Authority for Consumers and Markets (ACM) to allow dating apps operating in the country to use third-party payment mechanisms. In a review of the rule changes, the ACM believes Apple has yet to fully comply with the order.
Apple had until January 15 to provide developers with ways to take payments relating to dating apps through alternative means than the usual in-app purchases mechanism. Apple allowed developers to add an in-app link pointing to a website to complete purchases, and the option to use a third-party payment system.
On Monday, the ACM declared Apple had "failed to satisfy the requirements" of its order. Since Apple failed, this meant it was subject to an initial fine of 5 million euros ($5.6 million). If the order still isn't met, the same fine would be charged weekly, up to a maximum of 50 million euros ($56 million).
The ACM says Apple fails "on several points," with the biggest one being that Apple has "failed to adjust its conditions, as a result of which dating-app providers are still unable to use other payment systems." Currently, Apple states on its support page developers will be able to request one of the two new payment entitlements, but they aren't actually available to use at the moment.
Since dating app providers can "merely express their interest" to Apple, this doesn't satisfy the order.
Apple is also said to have "raised several barriers" for the use of third-party systems. In one example of this, Apple's offering of a choice is at fault since it requires developers to choose either the link or in-app use of alternative payment systems, but not both.
"That is not allowed," writes the ACM. "Providers must be able to choose both options."
It is unclear if the ACM objects to Apple's insistence it should still receive a commission for purchases made using third-party mechanisms in this way.
Apple has been contacted by the ACM that it has failed to satisfy the order's requirements, and reminds that Apple is "still obligated to act in accordance with said order" or face the recurring penalty.
Read on AppleInsider
On January 15, Apple confirmed it would abide by an order by the Netherlands Authority for Consumers and Markets (ACM) to allow dating apps operating in the country to use third-party payment mechanisms. In a review of the rule changes, the ACM believes Apple has yet to fully comply with the order.
Apple had until January 15 to provide developers with ways to take payments relating to dating apps through alternative means than the usual in-app purchases mechanism. Apple allowed developers to add an in-app link pointing to a website to complete purchases, and the option to use a third-party payment system.
On Monday, the ACM declared Apple had "failed to satisfy the requirements" of its order. Since Apple failed, this meant it was subject to an initial fine of 5 million euros ($5.6 million). If the order still isn't met, the same fine would be charged weekly, up to a maximum of 50 million euros ($56 million).
The ACM says Apple fails "on several points," with the biggest one being that Apple has "failed to adjust its conditions, as a result of which dating-app providers are still unable to use other payment systems." Currently, Apple states on its support page developers will be able to request one of the two new payment entitlements, but they aren't actually available to use at the moment.
Since dating app providers can "merely express their interest" to Apple, this doesn't satisfy the order.
Apple is also said to have "raised several barriers" for the use of third-party systems. In one example of this, Apple's offering of a choice is at fault since it requires developers to choose either the link or in-app use of alternative payment systems, but not both.
"That is not allowed," writes the ACM. "Providers must be able to choose both options."
It is unclear if the ACM objects to Apple's insistence it should still receive a commission for purchases made using third-party mechanisms in this way.
Apple has been contacted by the ACM that it has failed to satisfy the order's requirements, and reminds that Apple is "still obligated to act in accordance with said order" or face the recurring penalty.
Read on AppleInsider
Comments
As for specifying dating apps, ?????????? Why are they special? Is the Dutch government trying to make sure Apple doesn't know who's actually using their App Store and apps? I guess it's time to go after Costco and other membership stores along with every grocery store forcing them to allow me to walk into their store, pick up an item, and tell them I'm using an outside payment system. Of course they'll let me walk out the door. /s Yea, right into a police car on its way to jail. I know all of this is being done because governments want to dictate anything they can while not telling anyone how much in bribes they're getting.
But with the iPhone you don’t have that choice.
Yes, you were aware of that before you bought your iPhone. But ultimately it comes down to choice. If you want an iPhone you have to accept that you have no choice, it’s Apple App Store with exorbitant fees or the highway.
Apple makes 35-45% mark up on every phone they sell. The 30% markup on the App Store isn’t really justifiable and we all know it.
Yes, there are benefits to the end user to being locked down to one App Store. But Apple is blowing their chance of keeping iOS apps locked down by their greed. And yes, it is greed. Most companies either make money on the hardware sale or hope to make it up via the software. Apple makes eye watering profits on the hardware and then takes 30% for all software sales. Sadly that’s Tim Cook for you though, he’s obsessed with profits over everything else.
Personally I hope Apple maintains the one App Store and their control over it. I believe there are benefits to me for them doing so. In terms of security, privacy, etc, it’s much better.
At the same time I can see the way the wind if blowing. If Apple charged a fair percentage on the App Store, say 5-10% this would be a non issue. But there intransigence and greed is causing this to blow up like a grenade they insist in holding in their hand. Surely even somewhere like you, who absolutely refuses on some weird point of principle to see any wrong with Apple, can see the way this is going. They are in an indefensible position and are only there because of Tim Cook’s greed.
What's your source on iPhone markup? I've always read they have a 30s margin on their products, but haven't heard it claimed the markup is almost 50%.
As for the App Store, as somebody who's built & sold products to national retailers, it's much cheaper than what I'm used to. As a wholesaler my products were often at least doubled in mark up before they got to the end consumer. Apple/Google/Microsoft charge 30 or 15%, much less.
There is an obvious problem with the mall analogy and that's why it fails.
Once you purchase an iPhone or iPad (gaining access to that mall in the process) your only 'mall' is the 'Apple mall' but there are no stores competing with each other. No. There is only really one store, which not only doesn't have any competition, but also decides for you what you have access to purchase.
On top of that, no purchaser of iDevices is ever clearly made aware of these limitations.
In fact, that is where I believe Apple could run into problems in the EU.
It's not that the current setup couldn't survive scrutiny but that it might end up being necessary to make purchasers sign acceptance of Apple's control, for it to continue.
We'll see.
This makes no sense. I do not have to pay to enter the App Store (the mall). And there are lots of "stores" in the mall competing with each other. Each developer selling/distributing apps in the App Store IS VERY MUCH competing with the other stores in the mall.
Your analogy (or complaint about the "mall analogy") makes absolutely NO SENSE.
People aren’t bothered by the 2-3% savings any store competition will actually bring at the expense full platform integrity.
Some are addicted to choice, mistakenly believing it affords them control (it doesn’t). But as always these loud, gullible idiots will ruin things for the rest of us.
Developers also pay to create the apps.
Having paid to get access to the platform, there is only one App Store (mall, or whatever you want to call it). No competition is allowed.
Yes, you can purchase from other mobile app stores, but not without giving up on your Apple device and the financial hit of doing so.
That judge mentions that Apple's insistence that their conditions are necessary doesn't make sense given that these don't exist for physical goods and video services.
(https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBROT:2021:12851)
That will suck, a little or a lot depending in the kind of app, but that is the alternative.
Why do apps suck less than the internet?
Because Apple worked and works to make it suck less, for which they want to be paid if you benefit from it.
If a developer think it's too expensive, because they have a business model that doesn't allow for paying for Apple's services, they shouldn't use Apple's services.
If you have a product to sell, but you cannot make money if the supermarket takes their margin, and setting up a stall on the street sucks, would it be sensible for a judge to order the supermarket to allow you to set up your own cash register in the supermarket?
There is only one, on device app store and therefore no competition.
Buying into an alternative platform is a valid option but if you've already bought into an iDevice, unaware of the finer details Apple's control, it is a little too late.
And no one is clearly spelling out the limitations to buyers at purchase time.
If Apple were to clearly spell the limitations out at purchase time and require customers sign acceptance of the limitations, I doubt it would run into 'competition' related problems, at least with the App Store.