Apple is ordered by the Dutch antitrust authority to change its in-app payment system which not only charges developers 15% or 30% commission for all in-app purchases made via App Store but also does not allow alternative payment systems on iOS.
People familiar with the matter told Reuters that the Dutch authority has found that App Store’s in-payment system is anti-competitive and Apple uses abuses its dominant position to crush the competition.
Following South Korea, the Netherlands order Apple to change App Store policies
App Store has been under the radar of regulators, because of in-app purchase commission, primarily. Developers complain that a 30% share of all in-app purchases is high which impacts their revenue growth, especially a problem for small developers. Apple argues that 30% is an industry-standard commission and the company uses that revenue to sustain all the services App Store provides to users and developers.
During the COVID-19 pandemic, the Cupertino tech giant reduced the in-app commission to 15% for developers who earn $1 million or less annually in 2020. But that is not enough for antitrust regulators. Recently, South Korea passed a bill that will force Apple and Google to allow alternative payment methods on iOS and Android, respectively. The law has yet to go into effect. And now the Netherlands has ordered the iPhone maker to make changes.
The Netherlands’ Authority for Consumers and Markets (ACM) last month informed the U.S. technology giant of its decision, making it the first antitrust regulator to make a finding the company has abused market power in the app store.
ACM has not levied a fine against Apple, but demanded changes to the in-app payment system, the people said. An ACM spokesperson declined to comment, saying that the matter is currently under legal review. The regulator has previously said it expects to publish its decision this year.
Maybe after App Store, the Dutch antitrust authority will target Apple Pay. In December 2020, the Netherlands Authority for Consumers and Markets began its probe into payment apps’ access to near-field communication (NFC) which allows people to wave their phones at payment terminals to make purchases like Apple Pay.