To our total surprise, Apple makes adding alternative payment systems to apps 'painful, expensive, clunky'

Developers fume while competition watchdog issues a third puny €5m fine

Apple's idea of complying with the law in the Netherlands offers a glimpse of what developers elsewhere have to look forward to if regulators elsewhere succeed in challenging the company's control of its iOS App Store.

Apple is currently trying to fend off lawsuits and proposed legislation around the globe that threaten its stewardship of its iOS App Store. Third-party developers and lawmakers argue that the iGiant's oversight, through contractually enforced rules, is anticompetitive. They aim to have some, if not all, of the company's requirements, like using only using Apple's own in-app payment system, relaxed.

Beyond payment processor flexibility, many third-party developers, particularly those trying to compete with Apple, want iOS device owners to be able to choose to sideload apps – perhaps with the assistance of a third-party store but without Apple's permission and rent-seeking.

Apple has argued that sideloading – commonplace on macOS – would be a security disaster. But it has had to give some ground.

In the US, Epic Games' legal challenge of Apple's store dominion is being considered in federal appeals court while US lawmakers are debating various proposed bills that would limit Apple's ability to dictate terms.

Elsewhere, authorities have taken steps to rein in Apple, though their rules apply to narrow markets. In August, last year, South Korea passed a law forbidding Apple and Google from requiring that app developers use their respective internal payment systems. Last September, Japan's Fair Trade Commission forced Apple to allow reader apps – apps that display content previously purchased from outside iOS – to include in-app links to external account setup functions.

Doubling down on the Dutch

More recently, The Netherlands' Authority for Consumers and Markets has told Apple that it needs to allow third-party payment systems in dating apps.

Apple's response has not pleased anyone. Popular coder Marco Arment suggests Apple's response can be summarized with a single character: 🖕, the middle finger emoji.

"A recent order from the Netherlands Authority for Consumers and Markets (ACM) will allow developers of dating apps on the Netherlands App Store to use alternate payment processing options," Apple said in a developer communique posted last week. "These changes will compromise the user experience, and create new threats to user privacy and data security.

"We have appealed the ACM’s decision. In the meantime, we are required to make the mandated changes and are providing further details today which satisfy our legal obligations in the Netherlands while helping to protect users from these increased risks."

To comply with the ACM decision, Apple will charge a 27 per cent commission on dating app transactions in the Netherlands, which for those who can find a payment processor that charges only three per cent sales fee will result in the same 30 per commission Apple would have charged for using its in-app purchase system.

App creators who do so will be responsible for collecting and paying applicable taxes, like The Netherlands' value-added tax (VAT), if their payment processor does not provide this service.

Google, in its Android ecosystem, is charging a 26 per cent commission on in-app sales through third-party processors, to comply with South Korea's law.

It gets worse. As Arment points out, iOS developers have to create a separate app that's only for sale in the Netherlands. This one-off app cannot also support Apple's in-app purchase system and must present an in-app modal sheet that warns, "Only purchases through the App Store are secured by Apple."

Any web links included must be declared in the app's Info.plist file and cannot contain any query parameters – presumably Apple is concerned about data exfiltration via URL requests. And developers using a third-party payment processor must file monthly reports to Apple listing every external transaction and may be audited by Apple to ensure the company gets paid its commission.

No one's feeling the love

"You can just FEEL how much [Apple despises] having to do any of this," observed Arment, via Twitter. "They’re making non-App-Store payments as painful, expensive, and clunky as the regulators will tolerate."

The Netherlands isn't particularly tolerant of Apple's approach. The ACM on Monday reportedly fined Apple five millions euros ($5.72m), the third time it has done so in as many weeks, for failing to adequately comply with its rules. Two weeks ago, the ACM said Apple will be fined every week until it meets its obligations, up to a maximum of €50m ($57m), or around five hours-worth of profit based on Apple's 2021 results.

Developer Kosta Eleftheriou, an app developer who sued Apple last year for unfairly rejecting his Apple Watch keyboard app, FlickType, told The Register that further resistance from Apple seems likely.

"I think we can expect Apple to keep dragging their feet, and both delay as well as water down the intended effects of these rulings," he said. "However, I believe Apple’s strategy will backfire because it will expedite the process of how regulators figure out the best way to reign Apple’s monopoly power in iOS app distribution and in-app payments."

Eleftheriou argues that Apple's efforts to keep control over its App Store and to prevent iOS app sideloading are fundamentally disingenuous. He points to the company's macOS security page that describes how "apps from both the App Store and the internet can be installed worry-free," because macOS's Gatekeeper technology "ensures that all apps from the internet have already been checked by Apple for known malicious code," and because Apple has the ability to disable malicious apps on macOS.

"Apple has had the technology and has claimed that you can sideload 'worry-free' on macOS since at least 2019, with parts of that technology going all the way back to 2012," he said, adding that Apple could make iOS security even better than macOS because iOS offers less opportunity for privilege elevation than desktop operating systems. ®

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