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Who wins when governments go head-to-head with tech giants – and who should we cheer for?
We get a little test of this question in the Netherlands. Last year, the Dutch equivalent of the US Federal Trade Commission became one of the world’s first regulators require Apple offers users several payment options for using dating apps on their phones. It was a small crack in the absolute control Apple has had over iPhone apps since 2008.
It has now become a standoff between the world’s most valuable company and Dutch bureaucrats. Apple offered a workaround, but the regulator called Apple’s behavior “regrettable” and issued weekly fines totaling 25 million euros (about $28 million). Apple says the security and convenience of iPhone owners would be compromised if this were allowed, but also says the company is meeting its legal obligations.
I wouldn’t normally pay attention to a relatively minor regulatory beef, but the company fights like it’s a big deal. Apple’s response is also indicative of how tech superpowers are responding to government efforts to change the role of technology.
More and more authorities all over the world – in democratic and authoritarian countries – want to get tech companies to change what they do. Tech giants tend to say they obey the law wherever they operate. But they also push back against governments and hijack or shape laws and regulations. And it is not always easy to tell the difference between justified defiance and corporate impunity.
For example, democracy advocates have criticized Facebook, Twitter, Apple and Google for not doing more to push back against government efforts to censor political speech in countries like Vietnam, India and Russia. After mass shootings in San Bernardino, California, in 2015 and Pensacola, Florida, in 2020, internet evangelists praised Apple for refusing to help the FBI break into killers’ iPhones.
The Netherlands has become an unlikely high-stakes tech battleground from 2019when the Consumer and Markets Authority began investigating whether Apple’s app storefront had breached the country’s abuse of power laws.
The general problem is the same that Apple is facing everywhere, from Fargo, ND, to Seoul and many more capitals of the world and the courtrooms in between. Some authorities and developers claim that Apple is unfairly controlling our smartphones and our digital economy by requiring iPhone apps to be downloaded through its App Store. There, the company sets the rules for appropriate content and earns a commission of up to 30% on certain purchases.
App developers including Match Group, the US company that owns Tinder, Match.com and other dating services, have used the Dutch investigation to air their grievances about Apple. Match wanted more options floating around the Apple store to entice people to pay for dating services.
In August, the ACM issued an order prohibiting Apple from requiring dating apps to use only the company’s payment system, which allows Apple to collect a fee. It might not sound like much, but the Netherlands could be one of the first dominoes to loosen Apple’s grip on the app economy.
In responseApple last month offered a set of terms that some app developers said was a hostile challenge of the Dutch regulator. Apple basically said that dating apps in the country can use any payment system they choose, but that Apple will collect a 27 cent fee on every dollar of in-app purchases and require that dating companies transmit information and audit. this.
Try to imagine if Walmart said shoppers could pay however they wanted, but it might cost more if you used a non-Walmart credit card and had to give Walmart your monthly card statement.
People watching Apple closely have noted that its approach in the Netherlands is likely a model for other cases in which judges or regulators try to force the company to do things it doesn’t want to do with its app store.
European Union antitrust chief Margrethe Vestager addressed Apple’s behavior in a speech on Tuesday. “Some goalkeepers may be tempted to stall or try to get around the rules,” she says. “Apple’s conduct in the Netherlands these days may be an example of this.”
The regulator says Apple’s new terms do not comply with the ACM order. “Apple’s so-called ‘solutions’ continue to create too many hurdles for dating app providers who want to use their own payment systems,” an ACM spokesperson said in a statement Monday. .
A court in the Netherlands will most likely have to resolve the dispute with Apple. All regulation is slow and complicated, but this dispute shows that those involving deep-pocketed tech companies could be even more so. The question now is whether Apple will fight current and future attempts to change its app store with the vigor it has in the Netherlands – and whether we will be better off or worse off if it does.