ACM obliges Apple to adjust unreasonable conditions for its App Store
The Netherlands Authority for Consumers and Markets (ACM) has ordered Apple to adjust the unreasonable conditions in its App Store that apply to dating-app providers. Dating-app providers are currently not able to choose freely a payment system for purchases made in their dating apps by consumers. [suspended]* If Apple does not adjust the unreasonable conditions within two months, it will have to pay a periodic penalty of 5 million euros per week up to a maximum of 50 million euros. In this way, ACM seeks to improve the situation for app providers regarding Apple’s unreasonable conditions.
Martijn Snoep, Chairman of the Board of ACM, explains: “Some app providers are dependent on Apple’s App Store, and Apple takes advantage of that dependency. Apple has special responsibilities because of its dominant position. That is why Apple needs to take seriously the interests of app providers too, and set reasonable conditions. That is what we are forcing Apple to do with this order. Protecting people and businesses against abuse of market power in the digital economy is one of our most important duties.”
What adjustments should Apple make?
Apple must adjust the conditions for access to the Dutch App Store for dating-app providers. Dating-app providers must also be able to use payment systems other than Apple’s payment system in the App Store. In that context, dating-app providers must also have the ability to refer in their apps to payment options outside the app. [suspended]*
What is the problem?
App providers pay 99 US dollars each year for using the App Store. Almost 85 percent of app providers pay only this fee. These are small businesses, but also major companies such as Amazon, Booking or Uber. If an app provider wishes to offer paid services or subscriptions within its app (like dating apps), Apple imposes additional conditions. [suspended]* This situation applies to slightly over 15 percent of all app providers. [suspended]*
ACM is of the opinion that these conditions are not proportional to the additional payment service. Furthermore, the conditions are not necessary for running the App Store. That is why ACM considers these conditions to be unreasonable and in violation of competition rules.
Dating apps
Various dating services exist on the Dutch market, which offer their services through apps. Since most consumers own an Android-based smartphone or an iPhone, most dating apps use the Google Play Store and Apple’s App Store. In order to maximize their reach, dating apps must therefore be available in both of these stores. After all, consumers also wish to reach other consumers with different types of smartphones.
On iPhones, dating apps can only be offered through the App Store, which makes dating-app providers highly dependent on Apple. Dating-app providers thus have little choice but to accept Apple’s conditions. ACM therefore establishes that Apple has a dominant position.
ACM and the digital economy
The digital economy is a key topic on ACM’s Agenda. People and businesses must be protected against online misleading practices and market power. In order to tackle abuses of dominant positions, ACM conducts investigations, and is able to impose sanctions on businesses, including fines and orders subject to periodic penalty payments. In addition, ACM is a proponent of the upcoming amendments to the European rules which stipulate that major companies and platforms must grant access to their platforms or technologies. Also, ACM has published ‘Guidelines on the protection of the online consumer’. These guidelines have been based on European consumer protection rules, and explain at what point online persuasion turns into deception. These guidelines form the basis for investigations and enforcement actions by ACM. In that way, ACM ensures that online markets, too, work well for people and businesses.
* In its ruling of December 24, 2021, the provisional-relief judge suspended parts of the order subject to periodic penalty payments as well as publication thereof. All sentences in this press release related to those parts suspended by the court have therefore been removed. Read here the court’s ruling (in Dutch).
See also:
24-12-2021 Summary of decision: abuse of dominant position Apple
24-12-2021 Judgment District Court on request for injunction against order imposed on Apple by ACM (in Dutch)