Apple Announces Alternative Payment Systems Policy For Apps In Netherlands
Consistent with the ACM’s order, dating apps that are granted an entitlement to link out or use a third-party in-app payment provider will pay Apple a commission on transactions. Apple will charge a 27% commission on the price paid by the user, net of value-added taxes. This is a reduced rate that excludes value related to payment processing and related activities. Developers will be responsible for the collection and remittance of any applicable taxes, such as the Netherlands’ value-added tax (VAT), for sales processed by a third-party payment provider. Developers using these entitlements will be required to provide a report to Apple recording each sale of digital goods and content that has been facilitated through the App Store. This report will need to be provided monthly within 15 calendar days following the end of Apple’s fiscal month.
Apple is doing everything they can to toe the line to comply with the Netherlands ruling on alternate payment systems for dating apps. I’m not sure you could find a webpage more emblematic of the idiom of following the letter of the law, rather than the spirit of the law. They are also simultaneously appealing the decision and that tone comes across in the text too, as if each sentence is dripping with resentment.
I can only assume this is just the first bout in many rounds of back-and-forth over terms, that will be replicated and reproduced on a global scale eventually. This court ruling is on enabling competition for in-app payment systems, rather than the general monopoly of mobile app stores. However, the two are obviously inextricably linked. No one is going to use a third-party payment system when the saving compared to Apple’s built-in offering is a measly 3%. These current terms will not incite competition in payment systems as no developer will ever implement one. If you think the 3% will just about cover independent credit card processing fees, the customer acquisition costs and additional support overhead alone will make it an unprofitable course of action.
Apple’s stated policy is not long-term sustainable. I don’t know whether it will be changed as a result of these proceedings, or a different lawsuit down the road. It will change. Everyone agrees 27% is a joke. I think it’s quite reasonable to say that 0% would also be unfair to Apple; Apple deserves something. It’s just figuring out what is an acceptable rate in a market which lacks other forms of competition like alternative app stores or native app sideloading. There are other distribution issues that Apple’s App Store model imposes but ultimately money talks, and all of this legal theatre is a protracted negotiation over that core commission structure. As a member of the Small Business program myself, 12% (15%−3%) sure feels a whole lot fairer than 27%. I honestly believe most of these big company lawsuits would fall away if Apple announced that 12% was going to be the new normal for everyone.