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Apple to allow third-party payment options for dating apps in Netherlands, but there’s a catch

Apple was similarly forced to cede ground to developers in South Korea, signalling what is to come for the rest of the world.

Apple will allow dating apps in the Netherlands to offer non-Apple payment options to users in compliance with a recent order issued by the country’s Authority for Consumers and Markets (ACM), the company said on January 14.

But even if developers choose to forego Apple’s in-app purchase system, they still have to pay the company a commission on transactions, Apple said. The company, however, did not specify if the same 15 to 30 percent would apply or a reduced rate.

These changes might also not be permanent as Apple has already appealed the ACM’s decision to a higher court. “We’re concerned these changes could compromise the user experience, and create new threats to user privacy and data security,” the company said.

What prompted the Dutch regulator to issue this order?

ACM launched an investigation into Apple in 2019 following multiple complaints including from Match Group, the company behind popular dating apps Tinder and Hinge.

In a statement to Axios in 2020, a Match Group representative said:

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Apple is a partner, but also a dominant platform whose actions force the vast majority of consumers to pay more for third-party apps that Apple arbitrarily defines as “digital services.” Apple squeezes industries like e-books, music and video streaming, cloud storage, gaming and online dating for 30% of their revenue, which is all the more alarming when Apple then enters that space, as we’ve repeatedly seen. We’re acutely aware of their power over us. They claim we’re asking for a “free ride” when the reality is, “digital services” are the only category of apps that have to pay the App Store fees.

Following its investigation, in its order dated 24 December 2021, ACM said that it has ordered Apple to adjust the unreasonable conditions in its App Store that apply to dating-app providers. Martijn Snoep, Chairman of the Board of ACM, said:

“Some app providers are dependent on Apple’s App Store, and Apple takes advantage of that dependency. Apple has special responsibilities because of its dominant position. That is why Apple needs to take seriously the interests of app providers too, and set reasonable conditions. That is what we are forcing Apple to do with this order.”

ACM noted that Apple’s conditions on developers “are not proportional to the additional payment service” and “the conditions are not necessary for running the App Store,” which is why they are “unreasonable and in violation of competition rules.”

What changes for dating apps in the Netherlands?

Going forward developers of dating apps have the following three payment options for their Netherland’s version of the app:

  1. continue using Apple’s in-app purchase system
  2. include an in-app link directing customers to the developer’s website to complete a purchase
  3. use a third party payment system within the app.

For options 2 and 3, developers will have to submit a request form to receive the appropriate entitlements, which will be made available shortly, Apple said.

Responsibilities of developers choosing alternative payment options: Apple added a word of warning for developers that choose to forego Apple’s payment system:

“Before considering applying for one of these entitlements, it’s important to understand that some App Store features that you may use won’t be available to your customers, in part because we cannot validate the security and safety of payments that take place outside of the App Store’s private and secure payment system. Because Apple will not be directly aware of purchases made using alternative methods, Apple will not be able to assist users with refunds, purchase history, subscription management, and other issues encountered when purchasing digital goods and services through these alternative purchasing methods. You will be responsible for addressing such issues with customers.” – Apple

Is Apple slowly losing control over the App Store?

This news comes a week after the Korea Communication Commission (KCC) said that Apple has submitted plans to allow developers in South Korea to use third-party payment systems in their apps in compliance with the country’s new law.

These two developments are the latest signs of Apple and Google losing the tightly-held control over their respective app stores and they signal what is to come to the rest of the world as developers in many other countries, including India, are demanding flexibility in choosing payment systems.

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In India, the competition watchdog launched an investigation into Apple recently and is already investigating Google on this matter.

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