Monday, February 14, 2022

Dutch antitrust authority keeps fining Apple for alleged non-compliance with App Store antitrust order, but its stated reasons are less than convincing

So the Dutch antitrust authority--Autority for Consumer & Markets (ACM)--announced today that it has imposed a fourth €5 million weekly fine on Apple for non-compliance with an order to allow dating apps to collect payments in ways that bypass the App Store's in-app purchasing system. However, that announcement falls short of what would convince me that Apple is really out of compliance.

I say so so despite frequently criticizing the App Store monopoly, as evidenced by my commentary on Microsoft's recent announcement on app distribution as well as yesterday's post on the asymmetry of Apple's unfettered power to approve or reject apps, to which I'd like to add a new tweet I spotted today and which makes me angry:

[Update on 02/15/22] This developer was lucky: Apple called him and explained the issue to him, and apparently acknowledged that the rejection should have been explained more specifically--a well-known problem with lots of those rejection notices. [/Update]

I strive to be a rational critic, not least because I'm committed to accurate analysis. In all sorts of contexts from app stores to standard-essential patents to video codecs, there are people who disagree with me, or who dislike me. That's OK as long as even my detractors can't deny that I have a high hit rate with my predictions, and must admit that I properly separate my opinion from the facts.

In a recent post entitled Resist the App Store tyranny, but don't troll Apple, I acknowledged that "for app developers it's a hassle to create a separate 'SKU' (shelf-keeping unit, though these shelves are virtual) for the Dutch market," but also expressed my understanding for Apple's decision to choose that particular implementation strategy.

I have two issues with today's announcement by the ACM:

  1. The only issue with Apple's special rules for the Dutch dating-app market that the ACM elaborates on is that "dating-app providers must develop a new app, and submit that new app to the Apple App Store." What the ACM complains about is that "[d]ating-app providers that opt for an alternative payment system are thus forced to incur additional costs" and that "consumers that currently use the app have to switch to the new app before they are able to use the alternative method of payment. It will cost app providers a lot of time and effort to inform consumers properly about such a change."

    If the alternative payment option saved end users a significant amount of money, I'm quite sure the transition would work (and would be worth developers' while).

  2. The statement furthermore says that "ACM has doubts about several other elements of the revised conditions that Apple has imposed on dating-app providers."

    It strikes me as odd that the ACM does not describe those issues even at a high level. Why aren't they being more transparent? Compared to them, Apple is currently more transparent. Ideally they should both tell us--the general public--what they do. But if one of the two sides was less transparent, it should definitely not be the governmental entity.

    Is the problem here--by any chance--that the ACM realizes its order is going to make no impact as long as Apple can charge dating-app providers a commission on in-app payments using alternative systems as well as out-of-app payments? Are they aware of the limitations of the decision they made? Are they now engaging in a publicity war with Apple because they hope to save fact that way--or hope that Apple will make concessions just to avoid being accused for lawless behavior?

I don't think anyone can blame Apple for standing its ground while it is appealing the underlying decision. What we are seeing here is premature enforcement, and the ACM may lose some of its credibility in the end.

One doesn't have to agree with Apple. Let me point you to a very thoughtful write-up by fellow blogger John Gruber. And here's a humorous take by Eric Seufert (Mobile Dev Memo) on YouTube (this post continues below the video):

It's true that Apple is making dating-app developers an offer with respect to the Dutch market that they won't be interested in. But the ACM needs to be more transparent about what it really wants Apple to do; it needs to be realistic about the limitations of the order; and Apple has the right to exhaust all appeals.

It still seems to me that what Apple is doing there is par for the course. In a nutshell: hardball, not hubris. Apple may actually prevail on appeal, at least in part. Let's be realistic about that.

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