Dutch Court Fines Apple Third Time Over App Store Fees

The Dutch competition regulator has imposed a third weekly fine on Apple following a December decision that the company must allow some app developers to use alternative payment systems.

The initial decision imposed a penalty of 5 million euros (£4.2m) per week until Apple complied, with the first penalty imposed after the Authority for Consumers and Markets (ACM) said Apple missed a 15 January deadline for compliance.

The December decision applies only to developers of dating applications.

The ACM initially said Apple had not yet complied, but had only stated it planned to do so.

Commission fees

Apple has since published information for developers telling them how they can route in-app payments through alternative providers.

A week ago, the ACM said Apple had still failed to comply because it had put “barriers” in place to dissuade developers from switching to an outside payment system.

For instance, developers had to choose between an in-app alternative payment system or one running outside the app, and were also required to submit a separate version of their app for the Netherlands to enable the system.

On Friday Apple announced furthermore that even if developers go to the trouble of enabling an external payment provider, Apple itself will continue to levy a 27 percent commission on in-app sales, only 3 percent lower than its typical 30 percent commission.

‘Ashamed’

Prominent iOS developer Steve Troughton-Smith called the 27 percent commission “absolutely vile” in a post on Twitter, adding that “everybody on their executive team should be ashamed”.

Apple said in its documentation that the commission is “consistent with the ACM order”.

The company did not immediately respond to a request for further comment.

The ACM said it was “disappointed in Apple’s behaviour and actions”, adding that its decision has been upheld in Dutch courts.

In response to a query, the agency said it couldn’t elaborate on whether the 27 percent commission  was consistent with its order, beyond its public statements.

Apple is appealing the ACM’s decision, arguing alternative payment systems “compromise the user experience, and create new threats to user privacy and data security”.

Legal challenges

Google in November proposed reducing its own commission by 4 percent for developers using external payment systems, in response to a South Korean antitrust law that passed last year. The new rules are due to be fully implemented in March.

Reuters cited an unnamed South Korean official as saying that such barriers may not “fit the law’s purpose”.

“If app developers find it realistically difficult to use an alternative payment system and resort to using the dominant app store operator’s payment system, it would not fit the law’s purpose,” the person said.

Last year a US court ordered Apple to allow developers to link to external payment processors after a legal challenge by Epic Games, but the order was later put on hold pending appeal.

Apple, Google and other major tech companies are facing a range of legal and regulatory actions aimed at reducing their alleged abuses of market power.