The Netherlands Starts Fining Apple for In-App Payment Violations

Posted on January 24, 2022 by Paul Thurrott in Apple, Mobile, iOS, iPadOS with 19 Comments

The Netherlands antitrust authority has fined Apple €5 million for failing to meet the in-app payment systems requirements it handed the company in October. And it will continue fining Apple each week until it complies.

The Netherlands Authority for Consumers and Markets (ACM) previously found Apple’s in-app payment system to be anti-competitive and ordered the company to change its business practices.

“Apple has failed to satisfy the requirements set by the Netherlands Authority for Consumers and Markets (ACM) regarding payment systems for dating-app providers,” an ACM announcement explains. “ACM has come to this conclusion following an investigation into Apple’s statements of January 15, 2022. This means that Apple now has to pay ACM the first penalty payment of 5 million euros.”

According to the ACM, Apple is required to allow developers of dating apps to use third-party payment systems, and it must let those developers communicate the availability of those payment systems from inside their apps. Now, for as long as Apple refuses to comply, it will be fined 5 million euros every week up to a maximum of 50 million euros.

“Apple has failed to satisfy the requirements on several points,” the ACM explains further. “The most important one is that Apple has failed to adjust its conditions, as a result of which dating-app providers are still unable to use other payment systems. At the moment, dating-app providers can merely express their ‘interest’. In addition, Apple has raised several barriers for dating-app providers to the use of third-party payment systems. That, too, is at odds with ACM’s requirements. For example, Apple seemingly forces app providers to make a choice: either refer to payment systems outside of the app or to an alternative payment system. That is not allowed. Providers must be able to choose both options.”

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Comments (19)

19 responses to “The Netherlands Starts Fining Apple for In-App Payment Violations”

  1. red.radar

    Since the fine caps out at 50M Euros, I am going to assume Apple is prepared to cut the netherlands a check. The question is what's next? Apple is free to continue in their behavior since they served their time?

    Seems like a Netherlands fine was rather feckless.

    • Davor Radman

      They might not be really expecting to fix it. 5m€/week is still a significant money that can help build lots of bike roads or kindergartens :)

    • wright_is

      The problem is, the laws were made for normal companies, for them that is a huge fine. For all of the companies I’ve worked for in the last 20 years, such a fine would bankrupt them. But for an Apple, it probably doesn’t cover the coffee budget.

  2. max daru

    GM made the calculation that fixing the Pinto's gas tank issue would cost more than paying settlements from people injured or killed in explosions. Might Apple just ride this out and pay the max fine?

    • maxima

      Gm did not make the pinto it was ford

      Gm was the Vega a car that rusted before it left the showroom

  3. Donte

    The gig is probably up for Apple and side loading, alternate app store/payment. There are a few countries forcing them now and this will only continue, quite possibly in the US.

    I personally will not install apps on my iPhone from another store, but to each their own. I think it will come into play in that there will be a toggle like in Android, where you must turn off the default setting to do this.

    Now I wonder where this will stop. Will Microsoft and Sony have to open of the console's to side loading. I think so if this happens to Apple.

    • wright_is

      I don't see the need for sideloading or alternate stores, but paying direct and not paying a tithe to Apple makes a lot of sense.

      That then gives the user a choice, either they can use Apple Pay, or if they already have a direct relationship with the app providers, they can use the existing payment relationship with them.

      For example, the Amazon Kindle, Audible and Amazon Store Apps are broken on the iPhone, because you cannot buy eBooks or audio books. That is much simpler on Android, you see a book you like, you buy it and start reading/listening. On the iPhone, you have to go to the web browser or use a different device, where you can use the app to purchase books.

      On the other hand, if it is some unknown app from Floggit-and-Run Ltd. I'd be much more comfortable to pay with Apple Pay and know they have my back, in case there are problems.

      At the end of the day, what is Apple providing, for the 30% that Amazon can't do itself for a fraction of that cost? I buy hundreds of Euros worth of books on Kindle and Audible each year, those are direct transactions with Amazon and they probably have huge savings for volume on their merchant fees, but if they sell on the iPhone direct, those books are 30% more expensive, for me, probably at least another 100€ a year, for nothing. (The purchase is done directly with Amazon, the books is delivered directly from Amazon's servers and nothing, other than the actual financial transaction (2-3% merchant fee) goes over Apple, so 30% for an eBook that Apple never even sees or has to transport is outrageous.)

      If it is the cost of running the store, I can't see that it is costing Apple 100€ a year to provide me with an app-update every couple of months, if it is, there store is incredibly poorly run!

      Yes, there is an argument that that 30% helps pay for free apps. But even so, the more I spend, the more Apple takes, there is no real relationship to the actual costs there.

      This annoys me greatly, mostly for the inconvenience with Amazon properties. But also Apple's attitude of, "if you do use an external payment service, we still want our 30% cut for doing absolutely nothing." If it is really about the cost of running the store, make them pay an annual fee to cover the software updates for each user that decides to use the external payment system.

      That is a lot more transparent than taking the 15% or 30% of every transaction, which clearly is way in excess of what it actually costs to handle the fee and host the apps, when you have people buying hundreds of Euros worth of products each year through the App Store.

      • sonichedgehog360

        > I don't see the need for sideloading or alternate stores

        Microsoft didn't see the need for Netscape either and worked to get them out of business. Apple only recently added a skeleton option for changing default apps on iOS and iPadOS, and you can only change them for the email client and the web browser. It is laughable that I can't change the default map app to Google Maps this late in the game when if Microsoft was running this parade, they would get slapped a bunch of suits and fines. Recall that N Editions of Windows which do not have Media Player are still produced in the EU to this very day, yet Apple gets away with the same shenanigans and only addresses them on their terms which serve their first-party needs. Don't get me started on the Developers Alliance (which I strongly suspect has Apple behind it) that is now blasting the internet ads circuit that somehow dismantling the app store model is bad for developers when developers have been doing off-store development for decades without issue.

    • gedisoft

      What's wrong with using Paypal on your iPhone ?

  4. mikegalos

    €5,000,000 is trivial money even if it's weekly.

    • jchampeau

      Exactly. The €50 million maximum fine is roughly .053% of Apple's profit in 2021 and .014% of their revenues.

  5. anoldamigauser

    Only dating apps?

  6. nbplopes

    Apple App Store is the only mechanism I know that has the ability to enforce fees over things it does not host, sell or distribute. All by requiring a mandatory POS device to be installed on properties that aren’t even theirs … case in case the Apps (no theirs) and the Smartphone (also not theirs)