In September, Korea became the first country to compel Apple and Google to allow other payment systems in their app stores and apps. A new law banned the two platform giants from mandating use of their own in-app payment systems, with fines of up to 3% of local revenue for breaches.

The Korean law is far from the only measure tackling the abuses arising out of the Google and Apple dominance of the apps market and platforms.

In October 2021, for example, Russia opened an antitrust case against Apple for failing to allow app developers to tell customers about alternative payment options when using the app store.

Figure 1: The iPhone maker has apparently started legal proceedings in relation to alternative payment options on its app store platform.
(Source: Apple)

The iPhone maker could face a fine based on its revenue in Russia if found guilty of a breach, Russia's Federal Antimonopoly Service (FAS) said at the time.

The FAS had given Apple until September 30 to alter its policies after issuing a warning on August 30, but the company apparently declined to change its rules despite the threat of a fine.

It is now being widely reported that Apple has started legal proceedings against the Russian regulator over this issue. Specifically, various reports say Apple is asking for a judicial review of the FAS warning from August to allow app developers to tell customers about alternative payment options when using its app store platform.

Rising tide of resistance

It's fair to say that Apple is in a global fight to protect its lucrative app store business model. Last year, app store sales topped $64 billion, according to a CNBC analysis. Apple's commission on in-app payments can be as much as 30%.

In the US, for example, a California class action was brought by smaller developers who claimed Apple was exploiting its monopoly power with its commissions of up to 30%. Apple then announced a settlement that eases some fees and restrictions on developers, including its previous monopoly on communication with customers.

Meanwhile, a weightier case between both Apple and Google and Epic Games, the publisher of Fortnite, was triggered by Epic introducing its own payment system into one of its games, prompting its expulsion from both app stores in August last year. The case, which Apple largely, but not entirely, won, revealed that Apple derives most of its app store revenue from gaming apps.

On the legislative front, the US Senate has introduced the Open App Markets Act, which like the Korean law would also allow developers to use their own payment system.

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In October, Dutch antitrust authority ACM ordered Apple to stop forcing software developers to use the US giant's in-app payment system, according to a Reuters report. Match Group, which owns dating service Tinder, was one of a number of companies whose complaints prompted ACM's investigation.

Meanwhile the EU has drafted the Digital Markets Act (DMA) that would serve as a body of antitrust law for the digital economy.

The DMA was established to ensure that these platforms behave in a fair way online and is one of the centerpieces of the European digital strategy together with the Digital Services Act (DSA). Essentially, the DMA sets rules on what companies with gatekeeper status will be allowed to do and not to do in the EU.

A European Parliament committee, the Internal Market and Consumer Protection committee (IMCO), has now adopted its position on the DMA – which means the act has moved further along the procedural route that should see it adopted throughout the bloc. The DMA file is due to be voted on in plenary in December 2021.

The approved text of the act should ultimately become the Parliament's mandate for negotiations with EU governments, planned to start under the French presidency of the Council in the first semester of 2022.

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— Anne Morris, contributing editor, special to Light Reading