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Apple hit with sixth antitrust fine over Dutch dating app payments – TechCrunch

By on February 28, 2022 0

Apple has still failed to comply with a Dutch antitrust order allowing local dating apps the ability to use third-party payment technology to sell digital content to users of their apps.

In a statement released today, the Dutch Authority for Consumers and Markets (ACM) said it had imposed a sixth fine (€5 million) on the tech giant for failing to comply with an order issued for the first time last year.

The iPhone maker now faces a €30m fine over the issue, as the fine has increased by a further €5m since last Monday – with the prospect of further increases of €5m euros in the coming weeks if it continues to block the regulator (up to a potential maximum of €50m).

“We did not receive any new proposals from Apple last week that would make them comply with the ACM requirements. Therefore, Apple must also pay the sixth penalty,” an ACM spokesperson said.

“In the week of February 14, we again explained to Apple what requirements we have and why the current proposals are insufficient. It looks like Apple won’t be making any changes to its original proposal to meet the requirements.

We contacted Apple about the latest sanction, but the company declined to comment.

Apple has maintained a public silence for weeks on the issue – including after EU digital strategy chief Executive Vice-President Margrethe Vestager denounced its behavior last week, accusing the company of a deliberate tactic of choosing to pay fines rather than comply with the competition. orders.

Although the news agency Reuters reported earlier today a letter Apple sent to the ACM, which it said it had obtained, in which the company claims it has complied with the regulator’s order – arguing that the developers of Dating apps wishing to take the right only have to do “a technical currency miner”.

The company has previously said it does not support the order, on the grounds that it risks degrading the user experience – while maintaining the claim that it is nonetheless complying by granting two rights to the developers in question.

In Apple’s full letter to the ACM — dated February 28 — that TechCrunch obtained, Apple Chief Compliance Officer Kyle Andeer writes that “Apple believes its solution is fully compliant with Dutch law.” .

In the letter, the bulk of the tech giant’s defense of its actions focuses on its requirement that dating apps submit a new binary in order to use non-Apple payment technology – which Andeer says, is not a particularly unusual step.

“This is a simple prerequisite that ensures that Apple meets its legal obligations in the Netherlands while having the ability to maintain its standard terms and conditions in the rest of the world,” he suggests, adding: “Apple’s global app store rules and policies require dating app developers that sell digital goods or services in their apps to use IAP functionality for those transactions, providing a safe, secure, and consistent experience. to users. This has always been true.

Andeer goes on to cite examples where he says online dating giant Match Group (which has a large portfolio of dating apps including Tinder) already offers different versions/binaries of its Pairs, Match and Our apps. Time “to accommodate different requirements or preferences in various jurisdictions”.

He therefore argues that this is “the same approach that Apple and developers use in other jurisdictions where there are unique legal issues that require a different approach in a particular jurisdiction” – further asserting the requirement to submit a separate binary is “neither costly nor difficult” for developers.

“Dating apps know about this process and actually engage in it voluntarily,” adds Andeer. “A new binary for the Dutch storefront would simply require a minor technical change to an existing app consisting of a limited tweak that allows a dating app developer to use a third-party payment processor or insert a link to a website for purchase There are no additional costs associated with this approach.

For its part, the Dutch regulator has previously said that Apple imposes “unreasonable” and “disadvantageous” conditions on developers wishing to use alternatives to its in-app payment API.

And – at a fundamental level – it seems pretty clear that there’s a difference between a developer doing something technical voluntarily vs a technical action being a platform requirement for them to access a provision they are legally entitled to.

Additionally, the ACM has previously suggested that it is unhappy that Apple is seeking to limit developers to one choice of payment technology – either using Apple’s built-in API. Where third-party technology – rather than allowing them to use all options in the same application.

(And in its letter to the ACM, Apple describes its response to the order in these terms – claiming that developers offering a dating app on the Dutch App Store have the ability to use “That is The in-app purchase (“IAP”) feature of Apple, a third-party payment processor Where a link from their app to a website” [emphasis ours].)

We have contacted Match Group for a response to the arguments cited by Apple in its letter to the ACM regarding the binaries and will update this report with any response.

As we reported earlier, lawmakers in the bloc, meanwhile, are in the process of agreeing on the details of ex ante competition rules that will apply exclusively to the most powerful intermediation platforms – called “guardians” – and last week Vestager quoted Apple. circumventing antitrust enforcement in the Netherlands to highlight the looming challenge for the Digital Markets Act (DMA).

This suggests that Apple’s response to the local antitrust order in the Netherlands could influence the final shape of the DMA, if regional lawmakers feel they need to further strengthen the package to reduce the risk of non-compliance.

That said, the DMA is already preparing the threat of very substantial fines for violations, up to 10% of annual worldwide turnover. (Which would be closer to $30 billion than $30 million in Apple’s case.)

So for tech giants to snub future Commission behavioral orders issued under the DMA would be a much more risky/expensive gamble – at least for those falling within the scope of the incoming pan-European settlement.

And that’s a big part of why the bloc is reforming and strengthening its approach to digital competition enforcement.

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