Britain’s antitrust regulator has proposed forcing Apple to allow developers to link to third-party payment options to purchase apps and subscriptions outside of the App Store.
The proposal would specifically ban Apple from using the same forms of “malicious compliance” it has tried in both the US and EU …
The story so far in the EU and US
The EU required Apple to permit third-party app stores, while a US court ruled that developers have the right to direct iPhone users to third-party payment platforms for app purchases and subscriptions. Britain’s Competition and Markets Authority (CMA) is now proposing to apply this latter rule in the UK.
However, Apple has so far sought to circumvent these requirements with tactics described as “malicious compliance.” In the EU, Apple used “irritating and scary” screens intended to deter iPhone owners from using competing app stores. In the US, the company insisted it had the right to charge commissions even on purchases made outside the App Store. The net impact of these commissions would negate any benefit for developers.
UK app payment proposals
The UK’s CMA now proposes to allow developers to steer users to alternative payment options outside of both Apple and Google app stores. Google has said it is already taking steps to comply.
To prevent Apple using the same tactic it is attempting in the US in an ongoing court battle with Epic Games, Reuters reports that the CMA specifically bans the iPhone maker from charging developers unreasonable fees for the privilege.
The watchdog said any fees charged by two of the world’s largest technology companies for allowing such “steering” would need to be fair and reasonable, and should be lower than current app store commissions, with savings passed on to consumers or reinvested in innovation.
“While it is only fair for Apple and Google to be compensated for the services they provide, any fees they charge must be justified through a robust, evidence-led framework involving due reference to both cost and value,” Will Hayter, executive director for digital markets, is expected to say later on Tuesday, according to an excerpt of his speech.
The proposal is now open to comments.
Apple Wallet rivals
The CMA also proposes to force Apple to allow third-party rivals to the Apple Wallet app for contactless payments. This would enable competitors to Apple Pay.
These payments require access to the NFC chip embedded in modern iPhones, but Apple does not permit banks or other financial institutions to use it. The CMA is proposing to change this.
The CMA said it was also considering requiring Apple to open up access to its near-field communication technology, which is used for contactless payments, potentially allowing developers to offer payment services within their own iOS apps. This could enable UK fintech companies to build alternatives to Apple’s wallet, including account-to-account payments and emerging technologies such as digital currencies, the CMA said.
Apple opposes both proposals
Apple, of course, opposes both of the proposals.
“When users are directed away from Apple’s trusted payment infrastructure, they lose the protections they rely on Apple to provide,” the spokesperson said, adding the U.S. tech giant would continue to “make our concerns clear” to the CMA.
9to5Mac’s Take
There is now substantial momentum behind obliging Apple to allow developers to choose third-party payment platforms for app and subscription sales in multiple countries around the world. The UK has clearly learned lessons from Apple’s response in other countries, and is seeking to specifically prevent the iPhone maker from technically complying while simultaneously negating any benefit to developers.
The case for opening up the NFC chip to banks and finance companies is significantly weaker. Apple’s fees are exceedingly small, and it seems unlikely iPhone users would choose to forgo the convenience of having all contactless payment options within a single app in favor of using rival apps with more limited scope.
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