Apple Fined €5 Million for Ninth Time in the Netherlands Over Third-Party In-App Payment Systems

[justperry]

Anyone thinking the ACM will stop at 50 million is delusional, next charge will be contempt with a much bigger fine.

 

[Sophisticatednut]

Waiting for Sony and Microsoft to be hit next regarding PS5 and Xbox stores. They might argue that you can buy games digitally from other places (digital codes). Stores are just the download source. Might get around it with

Totally depends. Considering Xbox and PlayStation only allow their payment system. And can be argued to have competitive options available

Apple allows multiple payment solutions based on arbitrary lines. And argued in this case about safety and security and not about profits

Because they (apple) want to have one solution and not a fractured solution?

Apple already have multiple solutions based on arbitrary lines as shown in the ruling of the judge.

This is primarily apparent from the terms and conditions for access to the App Store itself. Schedule 1 and 3 app providers gain access to the App Store without (can and need to) use Apple's payment services. This shows that it is technically possible within the App Store to run in-app purchases within an app via another payment system of your choice.

Showing that no technological limitations exist

Furthermore, Apple's Video Partner Program shows that the use of a self-chosen payment system is also possible for apps that fall under Schedule 2. Under this Program, such app providers are exceptionally allowed to use their own payment system as Schedule 2 app providers for in-app purchases for app users recruited outside the app.

The fact it’s allowed in the TOS for some apps arbitrarily is an argument against apple.

The preliminary relief judge does not agree that the order subject to a penalty requires drastic changes in the App Store. Apple must allow dating app providers to forward payment for in-app purchases to a third-party payment handler. The technical adjustments required for this in an app will be designed by the app provider and submitted (in an update) to Apple for approval. This is no different than what is already happening. All that is then required of Apple is to review and approve the update. This is not a novelty for Apple: even now, the vast majority of in-app payments take place outside the IAP API (by Schedule-1 providers such as Amazon, Booking, Expedia, Uber and Airbnb). In addition, the required adjustments are not irreversible for Apple. If the decision is quashed in proceedings on the merits, these adjustments can be reversed and the consequences will be purely financial. Expedia, Uber and Airbnb). In addition, the required adjustments are not irreversible for Apple. If the decision is quashed in proceedings on the merits, these adjustments can be reversed and the consequences will be purely financial. Expedia, Uber and Airbnb). In addition, the required adjustments are not irreversible for Apple. If the decision is quashed in proceedings on the merits, these adjustments can be reversed and the consequences will be purely financial.

It’s purely a financial effect and easily adjusted.

Apple's assertions that consumers (3) face significant security and fraud risks in carrying the charge and 4) also lose other functionality associated with IAP API and that 5) seriously and irreversibly damage Apple's reputation as the most secure and reliable technology platform, neither succeed. Payment services are widely offered by a significant number of professional parties. These parties compete with each other and are well aware of the risks of a bad name in security. In addition, Schedule 1 providers have been using their own payment system for years without increased security or fraud problems. To the extent that Apple believes there is a risk of reputational damage, it already takes that risk by allowing Schedule 1 apps (and some specific Schedule 2 apps) to settle payments outside of the IAP API environment. Furthermore, if payment outside the IAP API were to lead to greater security risks, it is unlikely that this would negatively affect Apple rather than the dating app providers. This is also apparent from the Kien study. Finally, the group of dating app users is a very small minority compared to the total group of buyers of apps in the App Store. Major effects of the burden on Apple's reputation are therefore highly unlikely. With regard to the loss of functionalities, Apple is mainly talking about functionalities such as "parental control" and "family sharing" that are not relevant for dating apps. Match Group correctly points out in this regard that the charge will only prohibit Apple from forcing dating app providers to use the IAP in the Dutch Store Front. Apple is free to continue to offer the IAP (and other related features) and try to convince dating app providers of its benefits.

And finally the whole of apples arguments are contradictory and not supported by evidence.

These aren't dating apps. They are prostitution apps masquerading as dating apps. They run a cash slicing monopoly on prostitution payments and are pissed that someone else is in on their pimping.

This is completely legal in NL which is why there is a regulator.

Lets also remember exactly how hard it was to cancel subscriptions everywhere before someone took the ability away from every shyster out there. This is where the regulators are doing damage to the consumers and supporting the business only. That's not a regulator, that's enforcing a corporate monopoly instead. Which is a crap ton worse.

Not at all. Regulators have already stipulated that you must provide a clear way to cancel subscriptions.

Damages to consumers haven’t been proven and are just baseless assertions by apple. And easily shown in their TOS and existing apps as completely fine.

Seems to me the argument is about process, not about end results. The regulator wanted developers to have a choice of payment systems. They got that from Apple, but apparently that's not good enough. They only want one app submission, not a separate one. If the NL got their way, why would they care how it happens? The user is going to see whatever payment system the developer wants to use, so it's a win for the NL. Why the continued fines? Seems to me there's more to the eye here.

My own opinion is that the NL shouldn't care if developers have to submit a second app for the NL only. They should only care about end result, not process. Are they trying to force this on the rest of the world? Apple is requiring a separate app so no one figures out a workaround in the rest of the world. What's the real reason the NL doesn't like the solution Apple presented, even though it gave them what they asked for?

The reason is it’s limiting the developers freedoms to chose for no defendable reason. And it prevents consumers from choosing between the payment systems for no reason.

And of course they care about the process, the end result isn’t very important. Because the point is more freedom for developers and the ability for payment providers to compete against apples IAP system. If apple still ends up with 99% of the shares because users actually like their IAP solution more, then that’s completely legal. Monopolies aren’t illegal, it’s only against the law to abuse a dominating market position. That’s all

No there is one solution.

Amazon, Booking, Expedia, Uber and Airbnb etc have a complete different payment system as a schedule 1 application

Amazon Prime Video, Binge, Canadian Broadcasting Corporation (CBC), Claro Video, C More, DAZN, Disney+, Globo, HBO Max, Joyn, Molotov, MUBI, myCanal, STARZ, and Viaplay.

Also have custom payment solution as a schedule 2 program as part of the

Apple Video Partner Program​

The US court didn’t think so.

The us courts are just incompetent,

Here the judge acts as the main investigator, court-ordered expert investigations can form a significant part of the trial. This is almost unheard of in common law,

inquisitorial role. They present arguments based on the evidence the court finds, answer questions that the judge requires and essentially assisting the court with building their client’s case.

in civil law, it is not the lawyers who act as the main investigator for their client’s case, but the judge. The judge’s role is, essentially, to establish the facts of the case and apply the relevant code.​

And as we saw in this case.
here apple was unable to argue that:
1: drastic changes must be implemented
2: it will be insecure
3: it will increase fraud.
4: it will affect their reputation for security and safety

And as pointed out by the court
1: they already have apps using alternative payment systems today for some services and apple video partner program
2: then why are other apps such as HBO max allowed to use custom payment systems
3: fraud hasn’t increased for the other apps such as HBO max or amazon prime
4: current available solutions haven’t impacted their reputation, and are more likely to impact the application developers.

 

[Sophisticatednut]

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[Sophisticatednut]

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[I7guy]

Apple already have multiple solutions based on arbitrary lines as shown in the ruling of the judge.

No there is one solution.

And finally the whole of apples arguments are contradictory and not supported by evidence.

The US court didn’t think so.

 

[Sophisticatednut]

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[I7guy]

Not at all. Regulators have already stipulated that you must provide a clear way to cancel subscriptions.

Damages to consumers haven’t been proven and are just baseless assertions by apple. And easily shown in their TOS and existing apps as completely fine.

In your opinion the assertions are baseless. But we will see where this goes.

 

[I7guy]

The reason is it’s limiting the developers freedoms to chose for no defendable reason. And it prevents consumers from choosing between the payment systems for no reason.

There is a valid reason, whether you agree with the reason is irrelevant.

And of course they care about the process, the end result isn’t very important. Because the point is more freedom for developers and the ability for payment providers to compete against apples IAP system. If apple still ends up with 99% of the shares because users actually like their IAP solution more, then that’s completely legal. Monopolies aren’t illegal, it’s only against the law to abuse a dominating market position. That’s all

Yes the DMA was crafted very specifically. But who knows where this will end up.

 

[Khalanad75]

Attempt to drag out the case in court for as long as possible, while buying time to work out a solution which does the bare minimum to allow side loading, while also making it as inconvenient for all parties involved, to the point where it becomes unfeasible for all but the most hardcore of users.

It's only the seriously hardcore of users that care about sideloading.

 

[Sophisticatednut]

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[Nuno Lopes]

My only problem with the morality is with respect to the payment handling.

It did not look like it was. Have you ever had problems with the way payments are handled in the context you portrayed as of dating apps? Maybe you are dissatisfied with the way the handled your subscriptions? You should write to regulators about that.

Or are you just generalising? I mean, I pay for stuff online all the time ... From groceries to books, from Airbnb to Concerts and Travel tickets ...

You talk like all this is a mess that needs a saviour for 30% revenue share but the experience of the 100% I know never had a problem that could not solve easily.

This is not to say that there aren't situations where people have problems and get bitten ... hey, that is not a singularity of the online context. Filling the air with the mindset that businesses are not to be trusted to handle payments but a handful acting as middleman is nothing but the beginnings up of a dystopian society ... an innovation.

 

[Sophisticatednut]

Vestager has a long history of putting extreme fines on US tech companies and then losing in court in the end (eg Apple Ireland) so let’s not get ahead of ourselves here. Apple is clearly planning on appealing this fine, and believes they can win, therefore they don’t want to give in on even the tiniest thing here because it could set a precedent and compromise their position long term. Even if what they’re doing now is a bad look.

That was a fine on Ireland, not apple.
And she have won the vast majority of cases against tech companies. Just look at the case against google that she managed.

Apple have already appealed the case to a higher court. They had a pre trial hearing to investigate the merit of the case as apple argued the court order should be implemented after the appeals process have completed.

The courts came to the conclusion:
1: apple have close or zero chance to win, outside on some parts of the case( these points have been censored in the court paper) there could be some merit to.
2: the damages apple Might suffer are only monetarily and are easily reversed and compensated by the ACM if overruled.
3: apple still must implement the changes during the appeals process.

And their actions if seen as hostile and bad intent, it will have legal consequences as it’s seen as lacking good intent.

With DMA it’s a moot point though. It’s a trash bill, but it’s passing, and Apple will almost certainly be forced to make changes to IAP and the App Store. What exactly those changes end up being, and what ends up being inadvertently affected by it, are not yet clear. But Apple is not going to like it.

And the DMA is a procedure against gatekeepers. It doesn’t allow the strictest implementations unless actual malicious behavior is proven, repeatedly working against the regulators.

And it contains certain standard requirements apple will have to comply with.

Under the initial draft of the DMA, examples of obligations on gatekeepers include:

• Allowing third parties to inter-operate with the gatekeeper's own service in certain specific situations.
• Allowing business users to access data that they generate in their use of the gatekeeper's platform.
• Providing companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper.
• Allowing business users to promote their offer and conclude contracts with their customers outside the gatekeeper's platform.

Examples of prohibited behaviour include:

• Self-preferencing – treating services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on the gatekeeper's platform.
• Usage of certain data, including usage by a gatekeeper of any non-public data from business users on its platform to compete with those businesses, and combining personal data obtained from the core platform services with any other service unless in accordance with the General Data Protection Regulation (GDPR).
• Preventing consumers from linking up to businesses outside their platforms.

Too much of a hassle and it would be harder to identify which apps work like this and which don’t.

It’s not a hassle. Apple already have APIs that uses geolocation to prevent features in different regions.
And it’s very easy to identify the apps:
Dating apps used in Netherlands.

Apple is right on this one, they asked for developers to be able to use an alternate payment system, they got it.

Those fines will be reversed.

Nope, they still implemented anti competitive barriers and prohibits more than one payment solution in the app. And apple failed to argue why IAP and 3d party solutions should not be allowed in the same app.

They haven’t even been able to defend why a separate app only available in the Netherlands can’t have two payment systems available. So this will likely become way worse.

The app should not need location services enabled to "know where you are" in order to function. It should default to asking where you'd like to search if you choose not to enable location services.

I guess google maps or TomTom doesn’t need your location as well to direct you to a location. Sometimes your location is a legitimate request. Such as tinder matching other users closest to you as you travel.

But don't Microsoft and Sony get a commission even from physical sales?

It’s much lower tho. But the alternative option can actually have different prices depending on the location you purchase it.
In stores. You can use visa, MasterCard or even Apple Pay to pay. And some jurisdictions even more alternatives such as swish. Stores can even use special store cards if they want next to other solutions.
Online you can as well use multiple ways to pay or storefronts who all asks different commissions for games and apps.

 

[bn-7bc]

Apples legal represenrative: zzzz, whats the accounting code this time, and are the account numbers the sane, can ve just duspence with yhus crap and set up a montly transfer?

lissten up Duch watchdig stop waisting youre time with this pin orick fines, apple make more than that 24 times evrtpy day add a few zeros before the decimal point and maybe they'll notice

 

[Sophisticatednut]

In your opinion the assertions are baseless. But we will see where this goes.

No, it the courts opinion. And I support my opinion that it’s baseless on the fact that the court explicitly said it’s baseless.

There is a valid reason, whether you agree with the reason is irrelevant.

The courts are the ones saying it’s not a valid explanation

Yes the DMA was crafted very specifically. But who knows where this will end up.

A protracted and outdrawn process apple still loses in the end, and these cases are used as legal precedent that shapes the DMA. Apple and google is likely responsible for the DMA being more strict

 

[bn-7bc]

They’re casually eating these 5 million euro fines when I got a talking to when I accidentally dropped and broke one of the iPads when I worked retail there. Sheesh.

Of couse, you are replacable to them the EU market is not. And the store you worked in alkso gad a way lower totnower, so thst one ipad might gave tipped your nanagers result above/below some magic number fir triggering a higher bonus

 

[theotherphil]

One more fine to go and it's a wrap. At this point, I think Apple is pretty much waiting to get fined one last time too.

Apple are clearly aiming for a court case. The ACM have been completely ambiguous in what they want Apple to provide. Apple submits a proposal and the ACM “asks the dating app developers if they’re happy”. I’m sorry, but that’s not how business contracts work.

If they win at court, that $50m gets refunded….and then some.

 

[Sophisticatednut]

Apple are clearly aiming for a court case. The ACM have been completely ambiguous in what they want Apple to provide. Apple submits a proposal and the ACM “asks the dating app developers if they’re happy”. I’m sorry, but that’s not how business contracts work.

If they win at court, that $50m gets refunded….and then some.

I'm sorry, but this is exactly how it should work. And it's how it has always worked in the EU.
Courts aren't here to hold your hand like a small child, they give you explicit guidelines that you must interpret and review your work as an adult.

 

[huge_apple_fangirl]

Under the initial draft of the DMA, examples of obligations on gatekeepers include:

• Allowing third parties to inter-operate with the gatekeeper's own service in certain specific situations.
• Allowing business users to access data that they generate in their use of the gatekeeper's platform.
• Providing companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper.
• Allowing business users to promote their offer and conclude contracts with their customers outside the gatekeeper's platform.

Examples of prohibited behaviour include:

• Self-preferencing – treating services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on the gatekeeper's platform.
• Usage of certain data, including usage by a gatekeeper of any non-public data from business users on its platform to compete with those businesses, and combining personal data obtained from the core platform services with any other service unless in accordance with the General Data Protection Regulation (GDPR).
• Preventing consumers from linking up to businesses outside their platforms.

It all sounds like great ideas on paper. But in reality, like so many EU tech regulations, it will have unforeseen consequences. Instead of Apple designing the product, bureaucrats in Brussels will. We will end up with something like this:

 

[MacBH928]

Netherlands must be happy with this deal, they just got 45M Euros out of nothing.

 

[Sophisticatednut]

It all sounds like great ideas on paper. But in reality, like so many EU tech regulations, it will have unforeseen consequences. Instead of Apple designing the product, bureaucrats in Brussels will. We will end up with something like this:
View attachment 1978781

lol, do you have actual examples? Brussels won't ever design anything, just say what you can't do.
Example the USB c regulation was worked on by a work group apple is a member of and agreed on. This group is the one who EU talked with to come to an industry standard.
And it's the USB-C port. Not the USB protocol.

Everything is just an exaggeration when it comes to security risks and the use of multiple stores

 

[djphat2000]

No. Because after paying the fine Apple still has to comply.

Do they though? I mean, in the words of my generation "make me".
But for real though. They have a solution. The ACM doesn't exactly like it. As far as Apple is concerned, they solved the issue. AKA "complied".

 

[macbeth1026]

There is nothing casual about it. Opening the gates is a slippery slope...it's a long-term strategic view.

I respect the sentiment, but I really was just being silly. I thought that was evident lol. International business relations and regulations are not something I’m an expert on.

 

[sideshowuniqueuser]

It all sounds like great ideas on paper. But in reality, like so many EU tech regulations, it will have unforeseen consequences. Instead of Apple designing the product, bureaucrats in Brussels will. We will end up with something like this:
View attachment 1978781

Now switch the drawing of the iPhone with a Mac (which allows sideloading, and always has), and oh, ok, these arguments are all pure FUD (MicroSoft's favourite tactic for maintaining dominance back in the day, and what made Bill Gates so rich).

 

[DeepIn2U]

I did, but i have also read the ACM paper.
This is about the developers and apples anti competitive behavior, not the consumers.

And they where told to stop using anti competitive practices and allow developers to use third party solutions next to apples solution.

Ok sounds good.

So … developers choose Apple or their own payment method.
That’s essentially and basically done by Apple.

The argument is Dutch Dating App developers have to choose 1 or the other.

In that specific suspension has the ACM specifically stipulated that developers CAN and MUST have the choice to CHOOSE either, per user, per transaction, and allow the end user to choose which option?

Yes at the end of the day the end user is affected so it does affect them they do matter.

I’m curious which developers in this region are in-arms against choosing 1 or the other not both for any user? That’s the part I’m trying to unequivocally. I suspect it’s not as clear cut unless I’ve completely glazed over or mis-read and if I’m presuming correctly Apple is playing semantics here or just simply doesn’t care and takes the fines.

 

[sideshowuniqueuser]

Yes, I think Apple is standing on principle (whether you agree with it or not). Will be interesting to see as move governments try to implement rules around this.

"Apple", and "standing on principle", wow what an oxymoron.