The Netherlands Authority for Consumers and Markets (ACM) has launched an investigation into whether Apple is abusing its power through the App Store, favouring its own apps over rivals.
The Dutch regulator has reported back after receiving several complaints regarding Apple’s behaviour surrounding the App Store, suggesting there might be some foul play afoot. The initial foray has led the ACM into a larger investigation to understand whether Apple, and Google for that matter, are abusing dominant positions in the app economy to drive more favourable positions for their own apps and services.
“To a large degree, app providers depend on Apple and Google for offering apps to users. In the market study, ACM has received indications from app providers, which seem to indicate that Apple abuses its position in the App Store,” said Henk Don, an ACM board member. “That is why ACM sees sufficient reason for launching a follow-up investigation, on the basis of competition law.”
The news will not be welcomed by Apple, which is also under investigation at European level following disagreement with music streaming app Spotify. Spotify is suggesting Apple deliberately disadvantages other app developers, and while the complaint lodged with the European Commission is confidential, it has created a website listed the five ways Apple does not play fair in the app economy:
- The 30% fee which is applied to in-app purchases
- Apple won’t allow developers to communicate deals and promotions directly to customers
- Users cannot upgrade to premium services in app
- Apple rejects app enhancements for unknown reasons
- Spotify cannot be installed on all devices in the Apple portfolio
Some of the reasons might sounds a little moany but Apple does not seem to be laying the same rules on its own apps and services. For example, Spotify cannot be played on the Homepod, but iTunes can. This point might be of interest to the Dutch authorities.
While the original complaints received by the Dutch regulator have mainly been directed towards Apple and the App Store, the ACM also notes the dominant position Google is currently in for the Android app ecosystem. This investigation will be wide enough to assess the position of both companies and their knock-on activities in the developing ecosystem.
The initial investigation, which the ACM admits has not been in-depth enough, has uncovered some worrying elements of the business, we can’t imagine it will be difficult to dig up much more dirt on the pair.
Although both the App Store and Play Store are critical gateways in connecting developers to millions of consumers, that doesn’t mean developers need to be happy about the terms. Many are becoming increasingly frustrated with conditions, notably the 30% commission, with the larger developers looking to avoid working with the pair entirely.
There are few titles which have the brand recognition to achieve success without the reach of the App Store or Play Store, but Fortnite is one. Last August, Fortnite announced it would only offer downloads through its own website as opposed to the app stores. Estimates suggest it would save the firm $50 million in commission paid to Apple and Google.
The ACM has been keen to point out it has not come to a conclusion, despite some worrying findings in the initial investigation, and it may well find no antitrust violations. Despite pleas of impartiality, Apple and Google should certainly be worried; Europe has been pretty hot on antitrust cases recently.