Apple has claimed that proposed UK competition reforms to its App Store risk “opening the door to scams”, as the Competition and Markets Authority prepares to push ahead with plans to loosen the grip the tech giant and Google hold over in-app payments.
The CMA on Tuesday launched a consultation on new conduct requirements under Britain’s Digital Markets, Competition and Consumers Act, challenging what it has described as an “effective duopoly” over mobile platforms. The regulator argues that consumers and app owners are being let down by restrictions on spending money outside Apple and Google’s app stores, where both companies charge a commission of up to 30% on purchases made inside apps.
“Apple claims CMA app store reforms risk 'opening door to scams' as UK watchdog targets duopoly”
Under the proposed changes, developers would be allowed to “steer” users away from the app stores to websites where they can make purchases directly, bypassing the mandatory fees. The CMA said tackling barriers on steering “would benefit competition” and that Apple and Google could still levy fees for allowing steering, but such charges would have to be applied fairly.
Google said it had already made the required changes, including allowing apps to steer their users outside the Play Store to complete transactions. The company has also implemented changes to fees it charges apps as of this week, including fees for “steering” users to alternative payment methods.
The restrictions have meant, for instance, that Spotify does not allow users to buy monthly subscriptions in the Apple app store because it does not want to pay the fees and pass them on to consumers. Instead, would-be subscribers need to sign up via the desktop website in the UK.
Will Hayter, the CMA executive director for digital markets, said it was important to give apps and users more choice about how they carry out transactions and communicate. “This is not only because choice is inherently valuable but also because we see this as the best way to introduce some competitive pressure in a vital part of the mobile ecosystem that is otherwise sorely lacking such pressure,” he said.
Apple, which saw its shares fall after the announcement, hit back by claiming the proposals could compromise security. The iPhone maker warned that allowing developers to bypass its payment system “could open the door to scams” by removing the protections it claims its App Store provides.
The Coalition for App Fairness, whose members include Spotify and the dating company Match Group, criticised the steering fee proposal and said any charges should be justified by “transparent data” from Apple and Google explaining any underlying cost to the tech companies.
The regulator said Apple and Google operate an “effective duopoly” with at least 90% of UK mobile devices running on their platforms. The consultation will run for several weeks before the CMA decides on final conduct requirements.