Who wins when governments go head-to-head with technology giants — and whom should we root for?
We’re getting a small test of that question in the Netherlands. Last year, the Dutch equivalent of the U.S. Federal Trade Commission became one of the first regulators in the world to require Apple to give people multiple payment options for using dating apps on their phones. It was a tiny crack in the absolute control Apple has asserted over iPhone apps since 2008.
This has now become a standoff between the world’s most valuable company and Dutch bureaucrats. Apple has proposed a workaround, but the regulator calls Apple’s attitude “regrettable” and has issued weekly fines totaling 25 million euros (about $28 million). Apple says that iPhone owners’ security and convenience would be compromised if it allowed this, but also says that the company is complying with its legal obligations.
It might not look like much, but the Netherlands could be one of the first dominoes in loosening Apple’s grip on the app economy.
In response, Apple last month proposed a set of conditions that some app developers said was a hostile defiance of the Dutch regulator. Apple essentially said that dating apps in the country could use any payment system they wanted, but that Apple would collect a fee of 27 cents on each dollar of purchases that people made in the app, and require the dating companies to hand over information and audit it.
Try to imagine if Walmart said that shoppers could pay any way they wanted, but that it might cost more if you used a non-Walmart credit card and you had to give Walmart your card’s monthly statement.
Exactly. This is exactly the flaw in Apple’s strategy.