This article is part of the On Tech newsletter. Here is a collection of previous columns†
Who wins when governments go head-to-head against tech giants — and who should we advocate for?
We get a small test of that question in the Netherlands. Last year, the Dutch equivalent of the US Federal Trade Commission was one of the first regulators in the world to oblige Apple to give people multiple payment options for using dating apps on their phones. It was a small crack in the absolute control Apple has exercised over iPhone apps since 2008.
This has now become a deadlock between the world’s most valuable company and Dutch bureaucrats. Apple has proposed a solution, but the regulator calls Apple’s stance “deplorable” and has handed out weekly fines totaling EUR 25 million (about $28 million). Apple says the security and convenience of iPhone owners would be compromised if it allowed it, but also says the company is meeting its legal obligations.
I wouldn’t normally pay attention to a relatively minor regulatory issue, but the company is fighting like it’s a major issue. Apple’s response also reveals how tech powerhouses are responding to governments’ attempts to change the role of technologies.
More authorities around the world – in both democratic and authoritarian countries – want to get tech companies to change what they do. The tech giants tend to say they follow the laws wherever they operate. But they also oppose governments and bend or shape laws and regulations. And it is not always easy to tell the difference between just resistance and collective impunity.
Democracy proponents, for example, have criticized Facebook, Twitter, Apple and Google for not doing more to push back against government efforts to censor political statements in countries like Vietnam, India and Russia. After mass shootings in San Bernardino, California, in 2015 and in Pensacola, Florida, in 2020, internet evangelists praised Apple for refusing to help the FBI break into the killers’ iPhones.
The Netherlands became an unlikely high-stakes technical battleground starting in 2019, when the Netherlands Authority for Consumers and Markets began investigating whether Apple’s app storefront violated the country’s laws against abuse of power.
The broad problem is the same Apple faces everywhere from Fargo, ND to Seoul and many capitals and courtrooms in between. Some authorities and developers say Apple is unfairly controlling our smartphones and digital economy by requiring iPhone apps to be downloaded from the app store. There, the company sets the rules about what content is appropriate and collects a commission of up to 30 percent on some purchases.
App developers, including Match Group, the US company that owns Tinder, Match.com and other dating services, used the Dutch survey to voice their grievances about Apple. Match wanted more options in Apple’s store to let people pay for dating services.
In August, ACM issued an order banning Apple from requiring dating apps to use only the company’s payment system, allowing Apple to collect a fee. It may not seem like much, but the Netherlands could be one of the first dominoes to loosen Apple’s grip on the app economy.
In response, Apple last month proposed a series of conditions that some app developers believed were hostile backlash against the Dutch regulator. Essentially, Apple said that dating apps in the country could use any payment system they wanted, but that Apple would collect a 27 cents fee for every dollar of purchases people made on the app, and require the dating companies to provide them with information and handing over audits. the.
Imagine if Walmart said that customers can pay any way they want, but that it might cost more if you use a non-Walmart credit card and you have to give Walmart the monthly statement of your card.
People closely watching Apple say its approach in the Netherlands is likely a blueprint for other cases where judges or regulators try to force the company to do things it doesn’t want to do with its app store.
The regulator says that Apple’s new conditions do not comply with the ACM decision. “Apple’s so-called ‘solutions’ continue to create too many barriers for providers of dating apps who want to use their own payment system,” an ACM spokesperson said in a statement on Monday.
A court in the Netherlands will most likely have to settle the dispute with Apple. All regulation is slow and complicated, but this dispute shows that those involving tech companies with deep pockets may be even more so. The question now is whether Apple will fight current and future attempts to change its app store with the strength it has in the Netherlands — and whether we’ll be better or worse off if we do.
