To help end a row with Dutch regulators that has spanned over the past several months, Apple today published a new version of its App Store rules that allow local dating apps to receive payments through third-party processors. So far, its proposals to comply with a December ruling to compel the change have not satisfied the Dutch Consumer and Markets Authority (ACM) and Apple has earned 50 million euros in fines.
Apple previously announced that it would allow dating apps to use alternative payment systems, but it imposed different conditions on how to do so. Developers will have to submit a separate app duo to the Dutch app store, and will have to choose between using the in-app payment system or a third-party version, rather than being able to offer both in the same app. In particular, it said it intends to charge a 27 percent commission on payments made using alternative payment systems.
Now Apple is dropping its insistence on a separate duo for apps that see third-party payment systems. According to Apple, “This change means that developers may either include the entitlement in their existing dating app, but still have to limit its use to the app in the Netherlands storefront and on iOS or iPadOS devices.” It also sets out more details about how non-Apple payment system providers are evaluated and the examples Pages apps need to provide to customers to inform them that they are about to interact with a non-Apple payment service.
The company has consistently maintained its opposition to the ACM order, which Apple says will lead to threats to user privacy and data security. Because Apple’s post to developers still says “We disagree with the original ACM request and are appealing it”. Meanwhile, Apple will still insist on charging a 27 percent commission on transactions for apps that connect to or use a third-party payment system.
In line with the ACM’s request, dating apps that have been granted an entitlement to connect or use a third-party in-app payment provider will pay Apple a commission on the transactions. Apple will charge a commission of 27% on the price paid by the user, after deducting value-added taxes. This is a reduced rate that excludes the value related to payment processing and related activities. Developers will be responsible for collecting and remitting any applicable taxes, such as Value Added Tax (VAT) in the Netherlands, for sales processed by a third-party payment provider.
Developers using these entitlements will be required to submit a report to Apple that records each sale of digital goods and content facilitated through the App Store. This report must be submitted monthly within 15 calendar days after the end of Apple’s fiscal month. To see the details you’ll need to include in the report, view a report as an example. Eligible Developers will receive an invoice based on the reports and will be required to transfer the invoiced amount to Apple within 45 days after the end of Apple’s fiscal month. In the future, if Apple develops technology solutions to facilitate reporting, developers will be required to adopt such technologies.
On Monday, the ACM said its next step is to present the policy to “market participants for consultation.” If they agree to the terms, Apple may avoid escalating fines.
The dispute with the Dutch competition regulator is limited in scope and concerns only one type of software on the App Store. But it is part of the wave of antitrust scrutiny that Apple is facing around the world. The European Union’s Digital Markets Law may require support for third-party payment processors in all applications after it takes effect this fall, while South Korea recently passed a similar law. Apple’s in-app payments system has been the focus of a high-profile court battle recently with Epic Games, which eventually led to a US judge ordering Apple to allow developers to link to other payment options. The order was subsequently suspended pending appeal.
Update March 30th, 6:15pm ET: Additional context has been added.