ACM launches probe into Apple's App Store

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NL Law
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Digital Economy EU and Competition Law

The Dutch Authority for Consumers and Markets (ACM) has announced that it is opening an  investigation into whether Apple abuses the position it has attained with its App Store. The investigation will initially focus on news apps.

A market study into mobile app stores was published on the same day. This market study highlighted three types of conduct that the ACM will further investigate, relating to the favouring of proprietary apps over apps from other providers, unequal treatment of apps in general and lack of transparency.

On 11 April 2019, the ACM published a market study into mobile app stores in general, and those of Apple and Google in particular. Alongside this market study came the ACM's announcement of its investigation into whether Apple abuses its market position through the App Store. This announcement comes only four weeks after music streaming platform Spotify publicly submitted a complaint against Apple with the European Commission, arguing that Apple deliberately uses its App Store to give its proprietary apps (that is, apps developed and made available on the app store by Google or Apple themselves) an advantage over competing apps.

According to the market study, Apple and Google are in the unique position of being able to control the parameters for competition in their app stores, whilst themselves competing with the third-party apps offered in those app stores. In this light, the ACM has highlighted three types of conduct for further investigation.

App providers have indicated to the ACM that Apple and Google put third-party apps at a disadvantage compared to their own proprietary apps. According to app providers, proprietary apps are often pre-installed on users' devices, pay no commission and enjoy full access to payment data and full interoperability with, for example, the NFC chip, or Siri. Meanwhile, third-party apps are said to experience limited interoperability and to be granted limited access to customer and payment data. In addition, app providers are left no choice but to use the Apple and Google 'In-app purchases' (IAP) systems, and must pay commission on every IAP transaction.

Furthermore, the ACM has received complaints about the unequal treatment of comparable apps. App providers question amongst other things the basis upon which Apple and Google distinguish between apps which: i) are granted full interoperability, ii) are obliged to make use of the IAP system, iii) are obliged to pay a commission or iv) are featured in the app store, and apps which are not. According to app providers, both Apple and Google do this in a seemingly unequal manner.

A conclusion on whether these alleged limitations are in fact objectively justifiable will be subject to further research by the ACM on the basis of competition law.

Finally, app providers have also complained about the limited transparency and liability of both Apple and Google, which is said to be most apparent when it concerns the application and interpretation of their terms and conditions. The ACM will initially explore these complaints in the context of the upcoming Platform to Business Regulation.

This is the ACM's first investigative effort concerning an indication of dominant market power on a digital market since its position paper setting out its strategy in relation to this topic [See our March 2018 Newsletter].

This article was published in the Competition Law Newsletter of May 2019. Other articles in this newsletter:

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