The Netherlands Authority for Consumers & Markets (“ACM”) has imposed an order subject to a penalty on Apple for abuse of its dominant position. According to ACM, Apple imposes unreasonable conditions on dating app providers that wish to have access to the App Store. App providers are obligated, for instance, to use Apple's payment system (IAP) for the settlement of payments. App providers furthermore may not link to payment systems outside the App Store.
ACM finds that Apple has a dominant position on the market for app store services within its operating system (IOS), since Apple does not allow any other app stores within IOS. Apple is abusing its dominant position by (i) limiting the freedom of choice of dating app providers and (ii) disrupting the customer relationship between app users and app providers. That is in breach of Article 24 of the Mededingingswet (Dutch Competition Act) and Article 102 of the TFEU. The court ruled in favour of ACM on these points in preliminary relief proceedings.
Also abroad, the App Store access conditions are increasingly on the radar of competition authorities. Apple is being investigated in countries such as Germany, the UK, Russia, Japan, India and South Korea. In the USA, a court ruled last month that Apple must allow app providers to link to payment systems outside the App Store. That ruling was not upheld on appeal. But the Netherlands has the scoop: ACM is the first national competition authority to actually take enforcement action against Apple.
The European Commission (the “Commission”) is also currently investigating the App Store access conditions. That investigation is in keeping with its broader ambition to more closely supervise the digital economy. At the end of 2020, for instance, the Commission published legislative proposals for a Digital Markets Act (DMA) and a Digital Services Act (DSA). Those revolutionary bills aim to give competition authorities more tools to clamp down on big tech companies.
Although the DMA and the DSA have not yet come into force, it is clear that competition authorities already have the necessary enforcement tools at their disposal. The order subject to a penalty imposed on Apple and the penalty imposed on Samsung are the most recent Dutch examples of this. But other tech companies are also being closely scrutinised. Google, for instance, has been fined several times by the Commission and Facebook has been reprimanded by the German competition authority. This gives rise to the question to what extent the DMA and DSA can contribute to the current enforcement arsenal of competition authorities. Competition law will in any event remain in a constant state of flux as a result of far-reaching digitalisation and the increasing market power of large tech companies.
ACM has now investigated whether Apple has complied with the order. According to ACM, that is not the case: app providers still cannot use other payment systems. Apple will therefore now forfeit the first penalty of €5 million to ACM. If Apple remains in breach in the coming weeks, it will have to pay a weekly penalty of €5 million, subject to a maximum of €50 million. To be continued!
More information on dawn raids by ACM and the European Commission can be found at invalacm.nl.