The drip-feed of penalty fines for Apple in the Netherlands after an antitrust order about payment tech for dating apps has hit the maximum possible (for now) — reaching €50 million (~$55M) after the regulator issued a tenth consecutive weekly penalty of €5M for ongoing non-compliance.
But the Authority for Consumers and Markets (ACM) is sounding more positive today after Apple adjusted its most recent offer yesterday — saying the amended proposal “should result in definitive conditions for dating-app providers”.
Once it receives the full detail, the regulator said it will solicit market feedback and issue a decision on whether the proposal is acceptable or not ASAP. Although it has not provided any steer on how long that assessment might take, nor any details on the amended proposal itself. And it also warns that Apple could still face further penalties if the revised offer is still deemed unacceptable. So the already multi-month saga may not be done yet.
Previous offers by Apple were rejected by the ACM as creating unreasonable friction for the developers in question.
In a statement today, the Dutch regulator said: “ACM welcomes Apple’s current step. The adjusted proposal should result in definitive conditions for dating-app providers that wish to use the App Store. Once the proposal for definitive conditions has been received, ACM will submit it to market participants for consultation. ACM will then as soon as possible hand down its decision whether Apple, when implementing those definitive conditions, is in compliance with ACM’s requirement that alternative methods of payment should be possible in dating apps.”
“Until last weekend, Apple still had not met ACM’s requirements. That is why it has to pay a tenth penalty payment, which means that Apple must pay the maximum penalty of €50 million,” it added. “If ACM comes to the conclusion that Apple does not meet the requirements, ACM may impose another order subject to periodic penalty payments (with possibly higher penalties this time around) in order to stimulate Apple to comply with the order.
Apple was contacted for a response.
The public tug-of-war around the legal entitlement ordered by the ACM for local dating apps to be able to use of non-Apple based payment tech to process in-app sales of digital content if they choose has been going on since January — although the ACM’s order dates back to last year (but a court challenge by Apple limited public reporting of it until later).
While the case may appear almost ludicrously narrow — a sub set of apps within one small European market, where the ACM is empowered to issue such orders — an in-train reform of pan-EU digital competition law, aka the Digital Markets Act (DMA), is set to reconfigure how the most powerful platforms will be able to operate across the bloc in the near future by defining up-front standards of conduct in areas like FRAND terms for business users, baking in interoperability requirements and banning anti-competitive practices like self-preferencing, among other ‘dos and don’ts’ for gatekeeping giants.
So the ACM’s order offers a microcosm glimpse of bigger EU demands to come.
The DMA is very likely to apply to Apple’s App Store — hence the Dutch case has attracted high level interest within the EU, not least because the spat signposts the massive enforcement challenge the Commission will be taking on as it switches on ex ante oversight of gatekeeping platforms, likely starting from this fall. (Last week the EU institutions agreed politically on the detail of the DMA — but formal adoption is still pending.)
Under the market reform, the size of the penalties that the Commission will be able to levy are considerably larger — even up to 20% of worldwide annual turnover in cases of repeated breaches — so the regime looks far harder for platform giants to ignore.
Another key change is that the DMA will be proactive, setting an expectation of compliance from the get go rather than the EU’s competition regulator needing to spend months or even years proving non-compliance before being able to order changes.