In the Netherlands, Apple has been penalized again for violating an antitrust decree relating to dating applications. The judgment mandates that local dating applications be allowed to utilize third-party payment technologies if their creators so want, rather than being limited to Apple's in-app payment API for iOS.
Apple has been hit with a succession of (weekly) fines by the Authority for Consumers and Markets (ACM) since January for what it claims is continuous non-compliance with the order.
The fresh €5 million charge raises Apple's total penalty for this problem to €45 million (out of a potential of €50 million if it fails to satisfy the regulator by next week).
Apple's response to a succession of penalties throughout this time period has been to assert that it is following the order, despite the fact that the regulator plainly has a different (opposite) viewpoint.
The ACM has characterized Apple's answer as disappointing and unjustified, accusing the company of erecting an unnecessary barrier for developers who wish to utilize non-Apple payment technology to handle in-app purchases, rather than allowing them to do so freely.
The battle has raged for weeks, but despite yet another punishment, there appears to be a movement on Apple's part: According to the ACM, Apple submitted "new suggestions" earlier today, which it is currently reviewing to see whether they pass muster.
In a statement, an ACM spokeswoman said, "We will now review the content of these ideas." "In that sense, we'll meet with a variety of market participants. Our goal is to finish this evaluation as quickly as feasible."
The ACM hasn't said anything about what Apple is proposing in this revised compliance offer. (Requests for further information were also ignored by the regulator.)
"It should be emphasized that Apple had not satisfied ACM's standards until last weekend," the representative continued. "As a result, Apple is required to make a ninth penalty payment, bringing the total sum owed to Apple to €45 million euros."
Apple was also asked for comment on the development but has not answered as of this writing. Apple has declined to comment.
While the ACM's antitrust order only applies in the Netherlands and to a subset of apps (dating apps), it has attracted high-level attention in the European Union, indicating that the enforcement is being closely watched by policymakers at a time when they are simultaneously hammering out the final details of a major competitive agreement.
The EU is nearing completion of a long-awaited, ex-ante reform of digital competition legislation (known as the Digital Markets Act, or DMA) that will apply only to the most powerful intermediating Internet sites.
This is significant because Apple is almost certain to be designated as a "gatekeeper" under the DMA, which will impose a proactive antitrust compliance regime aimed at making digital markets more open and competitive, such as prohibiting platforms from cross-tying applications or enforcing lock-ins while also requiring them to support interoperability and enable service switching. As a result, Apple is likely to face similar (and, in some cases, even larger) pan-EU antitrust directives in the future, dictating how it must (and must not) operate in relation to third parties.
In a speech last month, EU commissioner Margrethe Vestager, who heads both the bloc's antitrust division and its digital policymaking, specifically mentioned the Dutch case, accusing Apple of "essentially" preferring to pay periodic fines rather than comply with a competition ruling with which it disagrees. She also stated that "one of the obligations included in the DMA" will be obligations related to third-party access to Apple's App Store.
The upcoming EU-wide legislation will be tough: Fines of up to 10% of annual worldwide revenue are possible, as is the possibility that the bloc will respond to systematic rule-breaking by imposing a structural remedy that requires a gatekeeper to be split up.
As a result, the 'comply vs deny' equation for IT companies slated to be subject to the DMA — which is only viable when a penalty can be written off as a 'cost of doing business — appears to be set for a drastic rebalancing under the revamped EU competition framework. And where €5 million – or even €50 million – isn't enough to move the operational needle, a penalty that could run into the billions, backed up by the risk that continuing to skirt legal requirements will force regulators to use their breakup hammers, appears to be a whole new kettle of compliance fish.