Apple faces $57 million fine for pathetic approach to third-party payments

Apple faces $57 million fine for pathetic approach to third-party payments

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Apple's "evasion" of the rules is "gross," according to Epic Games CEO Tim Sweeney.
Photo: Josh Davidson/Cult of Mac

Apple will be fined up to €50 million (approx. $57 million) by Dutch regulators for its rather pathetic attempt at allowing third-party payments for apps and subscriptions in the Netherlands.

Although Cupertino took half-hearted steps to comply with new legislation, it ensured that it was incredibly difficult for developers to implement third-party payment systems. It also demanded fees for payments it wasn’t processing.

Apple fined for being difficult

Apple said in a January 14 statement that it did not agree with new rules set by the Netherlands Authority for Consumers and Markets (ACM) concerned third-party payment systems for iOS apps, and that it would appeal the decision.

However, to comply with the legislation in the meantime, Apple confirmed it would make “two optional new entitlements exclusively applicable to dating apps.” (The new rules were only applicable to dating apps.)

Here’s how it works: If a developer wants to accept payments outside of the App Store, they must build and release a brand-new app for it. In addition, devs cannot offer third-party payments and App Store payments together.

What’s more, apps that take this option and accept payments through other systems will still be forced to cough up fees on those transactions. Apple actually wants to take a cut of the payments it isn’t even processing.

‘That is not allowed’

“Apple has failed to satisfy the requirements on several points,” reads a statement from ACM, published on Monday. “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’. In addition, 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.”

“Apple seemingly forces app providers to make a choice: either refer to payment systems outside of the app or to an alternative payment system,” the statement continues. “That is not allowed. Providers must be able to choose both options.”

The ACM has informed Apple that it does not satisfy its requirements. If the company does not make changes to comply, it will be fined €5 million (approx. $5.7 million) each week, up to a maximum of €50 million.

Apple discourages devs

Apple isn’t just trying to make developers jump through crazy hoops. It has also warned them that, if they accept payments outside of the App Store, “Apple will not be able to assist users with refunds, purchase history, subscription management, and other issues encountered when purchasing digital goods.”

Apple was never going to welcome new legislation like this with a smile, so it’s probably not surprising that it is doing all it can to discourage developers from avoiding the rules Cupertino lays down itself. But it’s about time the company began to accept that it’s going to have to loosen its grip on the App Store.

The Netherlands isn’t the first country to force Apple to accept third-party payments for apps and subscriptions — and it almost certainly won’t be the last.