One of the pillars of Apple’s super-lucrative business model – tight control over the App Store, specifically the in-app payment options, has taken another blow.
Granted, the latest chink in the App Store armor is not comprehensive and doesn’t cover a huge market – but the Dutch challenge to Apple’s way of running the App Store is one of many lately piling on the massive company.
In the Netherlands, the Authority for Consumers and Markets (ACM) has ordered Apple to make changes to what it said were “the unreasonable conditions in its App Store” concerning in-app payment, and rectify them by offering alternative payment systems.
But the decision only concerns several dating apps that filed a complaint – Match Group (who own Tinder and Match.com), and OkCupid. Games and other apps are not covered by this ACM decision.
The importance of channeling all the money through Apple is that it takes a big cut – from 15 to 30 percent from any purchases within an app – and so far, the only system developers could use was Apple’s own. Another rule that Apple is now expected to follow in the Netherlands is give developers the option of letting their users know there are payment options outside the app itself – once again, undermining Apple’s ability to collect a sizable chunk of revenue.
Announcing the details of the decision to mandate that Apple must make these changes, the ACM, after probing the App Store practices since 2019, essentially described Apple as a monopoly (“abusing its dominant position”), which for that reason has “special” responsibilities not to harm all those developers dependent on it and take their interest into account as well, by providing “reasonable conditions.”
If Apple decides to ignore implementing these changes by January 15, Dutch regulators will fine it with €5 million each week, with the cap for the total figure set at €50 million.
What, if any, effect the sum itself will have on the trillion dollar company, remains to be seen, but a spokesman for Apple said that the behemoth intends to appeal.
Apple seems to realize the danger here is not the fines it faces, but the possibility that its core business model might “die of a thousand cuts” being inflicted by regulators around the world.
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