The Netherlands’ competition authority has confirmed that it has issued Apple with a €5 million fine – about $5.6 million – due to noncompliance with an order requiring it to allow dating apps operating in the country to use third-party payment mechanisms.
Apple had announced to developers on January 15 that it would abide by the order imposed by the Netherlands Authority for Consumers and Markets (ACM). The Cupertino company had said in that update that it would achieve this by providing “two optional new entitlements exclusively applicable to dating apps on the Netherlands App Store that provide additional payment processing options for users.”
However, Apple had also said in that statement that it had fought the ACM’s decision by appealing to a higher court, “because we do not believe these orders are in our users’ best interests”, citing user privacy and data security concerns.
Addressing developers who wished to apply for one of the new entitlements, the company warned that “because Apple will not be directly aware of purchases made using alternative methods, Apple will not be able to assist users with refunds, purchase history, subscription management, and other issues encountered when purchasing digital goods and services through these alternative purchasing methods.” Apple told developers that they would instead be responsible for addressing such issues with their customers.
The ACM had made its initial ruling in October, published in December, determining that Apple violated Dutch competition laws. The regulator had told Apple that it was required to make changes to the App Store, and that if it didn’t, it faced fines of as much as €50 million (approximately $57 million).
Today, the competition authority said that the Cupertino firm had failed to satisfy the order’s conditions and was required to make amendments to align its dating-app rules with the order. The regulator further stated that if Apple continued to fail to comply with the order, it would have to pay a weekly penalty payment of €5 million, up to a potential maximum of €50 million.
The ACM said that Apple had failed to meet the order’s requirements “on several points”, explaining: “The most important one is that Apple has failed to adjust its conditions, as a result of which dating-app providers are still unable to use other payment systems. At the moment, dating-app providers can merely express their ‘interest’.”
The regulator further added: “Apple has raised several barriers for dating-app providers to the use of third-party payment systems. That, too, is at odds with ACM’s requirements. For example, Apple seemingly forces app providers to make a choice: either refer to payment systems outside of the app or to an alternative payment system. That is not allowed. Providers must be able to choose both options.”
In the meantime, the competition body said, “Apple now has to pay ACM the first penalty payment of 5 million Euros.” Needless to say, this could continue to be a costly skirmish for Apple in more ways than one…