Apple notches up ninth €5m fine for ignoring nation's competition watchdog
It's just a business expense at this point
Apple has just been assessed a ninth fine of €5m ($5.5m) in the Netherlands for failing to allow Dutch dating apps to process transactions using a third-party payment service, as required by the European country's competition watchdog.
And if the iGiant continues to dismiss the demands of the Authority for Consumers & Markets (ACM), it will receive a tenth and final €5m fine for ignoring Netherlands' competition watchdog after maxing out the penalty at €50m ($55m), or around five hours of annual profit based on Apple's 2021 financial results.
Thereafter, it's not clear what will happen but it appears likely the matter will return to a court in the Netherlands.
On Monday, Nando Kasteleijn, a journalist for NOS, reported that the ACM had penalized Apple for the ninth time, in keeping with the agency's commitment in January to fine the iPhone biz €5m per week.
The ACM in August 2021 determined that Apple was abusing its dominant market position by imposing unreasonable limitations on makers of dating apps in the Dutch App Store. The government agency found it unreasonable that Apple alone could collect payments – and a sizable sales commission – for dating apps in the Dutch App Store and directed Apple to allow app developers to use other payment systems.
Apple did not respond to the satisfaction of the ACM, so the agency in January announced it would fine Apple €5m every week until it complies, up to a maximum of €50m.
That's less than two hours worth of revenue for Apple, which earned $378.35bn in 2021.
On February 3, Apple responded by reducing its required earnings share for firms with $1m+ in annual revenue from 30 per cent to 27 per cent. App developers at the time dismissed the company's move as an effort to make alternative payment mechanisms as painful and as expensive as possible.
The ACM, still unsatisfied with Apple, continued to issue weekly fines. Then in late February, Apple reportedly sent a letter to the ACM arguing that the company has complied with the ACM order, a position the ACM did not accept.
"I understand that currently we have a difference of opinion that may ultimately have to be resolved by a court," the letter signed by Apple Chief Compliance Officer Kyle Andeer said, according to Reuters.
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In the ACM communique posted by Kasteleijn, the competition watchdog said Apple has made a new proposal to comply with its requirements. The message said the ACM intends to assess Apple's proposal and to talk to affected parties.
The Register asked Apple to comment. As you might expect, we've not heard back.
Since 2020, when Epic Games challenged Apple in the US and in other countries over its requirement that in-app payments go through Apple's own payment system, the iPhone biz has been besieged by efforts to weaken its control over its iOS ecosystem.
In November, 2020, Apple made a significant concession by halving its 30 per cent commission for in-app purchases to 15 per cent for companies with revenue of up to 1m annually. But large companies forced to follow Apple's App Store rules and to surrender 30 per cent of in-app sales want more favorable terms. To date, Apple is still fighting these legal and regulatory challenges, but has lost ground in Japan, South Korea, and in the Netherlands.
The ACM's decision in the Netherlands applies only to dating apps in the Dutch App Store, but presumably Apple is concerned the ruling could be applied to a broader set of apps and could spread to other countries.
In South Korea earlier this month, lawmakers approved an enforcement rule in support of last year's amendment to the country's Telecommunication Business Act. The rule, according to Reuters, bars companies like Apple and Google from requiring a specific payment method. ®