The Apple-ACM saga over in-app payments in dating apps continues with another €5 million ($5.5 million) weekly fine, but there's more. Dutch tech reporter Nando Kasteleijn published a note (image) from the competition enforcement agency of the Netherlands, the Autoriteit Consument & Markt (Authority for Consumers and Markets; ACM). It translates as follows:
"Apple made new proposals this morning to comply with the ACM's requirements. We are now going to evaluate whether those proposals are sufficient. We will also speak with various market actors. We hope to complete this analysis shortly. It is true [as the reporter apparently asked] that Apple failed to meet the ACM's requirements as of last weekend. Therefore, the 9th penalty payment also became due. The total amount is now at 45 million euros [$49.7 million]."
It would be interesting to know what proposal Apple has put on the table. In late February, Apple merely provided further explanations in support of its position that it was already in compliance with the decision. I realize that this may be a minority opinion, but I don't see why Apple's implementation of alternative payment methods would necessarily contravene the ACM's ruling--and I think the ACM should be more concerned about the impact on Dutch consumers from the complainant's own conduct.
Dating apps are a business built on network effects. If Apple had never imposed its 30% cut, prices would probably be roughly the same today, but the market leader would be more profitable. New entrants couldn't compete on price--for lack of those network effects. The ACM didn't pick the best segment of the app market for its case, let's put it that way.
So what's next? What the ACM indicates in that statement is a market test. It will ask dating-app makers whether they are satisfied with Apple's new proposal. Even without knowing what Apple offered, it's pretty much a given that Match Group--which operates Tinder and other dating services--is still going to complain. They want Apple to waive the 30% altogether, or at least for the largest part. Apple is not prepared to do that, and the ACM's ruling on in-app payments in dating apps isn't a basis for forcing Apple to give Match Group and others a free ride. Another disputes question is whether app makers have to submit a separate app for the Dutch market. The related requirement is neither exceedingly developer-friendly nor user-friendly, but that doesn't necessarily make it non-compliant.
By the end of this week, the ACM will have to decide on whether to impose the 10th and final weekly €5 million fine of the current enforcement campaign. The cap for the current enforcement effort is €50 million ($55 million). The assessment of Apple's latest proposal may not even have been completed by then, but it doesn't matter in practical terms because the ACM would need to make a new decision first, potentially with heftier fines, before it could fine Apple again after the first €50 million.
But before the current enforcement started, the ACM needed approval from a Dutch court. That will be the case again. Therefore, what Apple proposed today was most likely--even almost definitely--just meant to prepare the next round of litigation. The ACM will have to convince the court that Apple is not compliant. Arguably, Apple was already compliant before today's unknown proposal, but with whatever Apple put on the table today to set the stage, it further ups the ante for the ACM with a view to obtaining court approval for the enforcement of its next decision.
There's a key deadline on Thursday in Epic Games v. Apple: Apple will file its opposition to Epic's Ninth Circuit appeal (as I discussed in the final two paragraphs of this recent post) as well as the opening argument for its own cross-appeal of Epic's consolation prize under California Unfair Competition Law.
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