The Dutch antitrust watchdog's investigation of Apple's in-app payment rules further to a complaint by Match Group (best known for Tinder) has been a total failure. The Autoriteit Consument & Markt (ACM; Authority for Consumers & Markets), however, is claiming victory regardless. It would be unusual (if not unprecedented) for a competition authority to concede defeat, but the ACM--instead of keeping a low profile in an embarrassing situation--is making things worse with this press release:
The problem with the headline ("Apple changes unfair conditions, allows alternative payment methods in dating apps") is that it's old news. the enforcement dispute between the ACM and Apple has been going for months, and involved 50 million euros in fines that were imposed after Apple had, in principle, allowed alternative payment methods in dating apps.
While a few details have changed lately, the one thing that has not changed is that Apple still charges developers such a high commission for using third-party payment systems that it would be a "net negative" for developers to implement their own payment systems (for payments from Dutch users) in dating apps. That's because Apple's commission is only 3% below the App Store commission, and payment services charge roughly that percentage, or potentially even more on small amounts if they have a minimum per-transaction fee. Only if developers could realize a significant saving would it make sense for them to encourage users to sign up for a third-party system.
Apple's June 10 update to its rules for Dutch dating apps says this:
"The 3 percent commission discount also applies to in-app purchases that qualify for a lower commission rate (for example, App Store Small Business Program enrollees or subscription services after one year of paid service — both of which already qualify for a 15% commission)."
I had repeatedly said that Apple's previous rule for Dutch dating apps--27% on revenue generated via third-party payment systems--struck me as incompatible with the Small Business Program (though Match Group obviously isn't eligible for the 15% deal). But even with that oversight having been corrected, the 3% saving simply doesn't make it an economically attractive option for developers to promote an alternative payment system, much less while Apple is still appealing the underlying decision.
Martijn Snoep, Chairman of the Board of ACM, is quoted in the agency's press release, and the last two sentences are utter nonsense:
"That offers app providers more opportunities to compete. And consumers will ultimately reap the benefits, too.”"
For the reason I just explained, app developers have nothing to gain. Changing their software costs money; promoting the alternative payment system to consumers won't be easy (as developers can't profitably offer consumers a discount in exchange for using a non-Apple payment system). It's simply not worth it. And as a result, there won't be any consumer benefits--unless developers are prepared to promote an alternative payment system through discounts, in which case developers make less money than by going through Apple Pay.
Again, I don't blame the ACM for not saying "we lost." It would be the only honest thing they and Match Group could say in this situation, but for institutional reasons they can't. However, at least they shouldn't spout total nonsense. The part about benefits to developers and consumers is a disgrace. As a result of this, I will view whatever announcement the ACM makes in any context--including but not limited to App Store issues--as skeptically as, say, statements by the propaganda ministries of totalitarian regimes.
As I've said before, if the ACM had ever really had Dutch consumers in mind, it would have had to investigate Match Group itself.
The outcome that was announced yesterday (with Apple making its latest rule change public the day before) absolutely validates my previous feeling that the ACM decision was weak and it didn't really take much for Apple to comply with it. It was always clear that the real issue was the 30%. That problem is not tackled by a deal under which Match Group and others pay Apple 27% instead of 30%, as the 3% difference--which is eaten up by payment providers--doesn't make it a prudent and profitable choice for developers to implement and promote an alternative payment system.
The European Union could address the real issue through the Digital Markets act. Maybe that's what the Dutch ACM was hoping for when it decided not to tackle the heart of the problem through enforcement of traditional antitrust law.
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