Dutch Apple probe finds new angle to familiar complaint

02 Apr 2020 12:48 pm by Nicholas Hirst

With its new Apple probe, the Dutch antitrust regulator has carved out a niche in a crowded field as competition officials across Europe train their focus on smartphone app stores.

The Authority for Consumers and Markets last week opened an antitrust probe into Apple following complaints that the iPhone-maker was using its App Store to favor its own apps.

The ACM said its probe would focus in particular on concerns raised by providers of news-media apps in the Netherlands, as it published a 100-page market study on app stores.

Importantly, the focus on news serves to distinguish the ACM’s case from a case that may be pursued by the European Commission into a complaint by music-streaming service Spotify, which alleges that Apple abuses its ownership of the App Store to privilege its own Apple Music app.

But while the economic sectors are different, the underlying gripes are the same. The ACM highlighted concerns that Apple uses its control of the App Store and iPhone to push its own apps; limits app-makers’ access to data and ability to choose their preferred means of payment; and charges them excessive fees.

Publishers — via the European Publishers Council — have offered their full-throated support for Spotify’s complaint. They have yet to comment on the Dutch probe.

Although the ACM's report does not name what news-app developers it has spoken with, Belgian media groups Mediahuis and De Persgroep own many publications in the Netherlands, including the largest newspapers by circulation.

Apple last month announced plans to launch its own news service offering readers access to a range of publications on a subscription basis, known as Apple News Plus.

Spotify complaint

The concerns laid out by the ACM closely mirror Spotify’s complaint, meaning the Dutch regulator could probably expand its focus if the European Commission chooses not to take up the case. The watchdog has called on any other app providers to come forward if they experience any problems with Apple’s App Store, or with Google’s Play Store.

Apple has denied the accusations — both from Spotify and the Dutch competition authority — and says all developers have an equal opportunity to succeed in the App Store. “We are proud to have helped developers in the Netherlands reach hundreds of millions of customers in 155 countries, earning almost 450 million euros,” a spokesperson told MLex.

Google declined to comment.

There is no timeline for the Dutch probe. If borne out, the allegations could lead to Apple being fined. That would be the first sanction issued by the ACM since July 2017, when it fined state-controlled Dutch Railways NS 40.95 million euros.

Complementary investigations

The European Commission confirmed that it “takes note of the ACM study on the role of app stores in the digital economy. The study and the announced follow-on investigation complement the Commission’s decision on Google Android and the Commission’s ongoing assessment of Spotify’s complaint against Apple’s business practices.”

The Dutch probe would also appear to complement the commission’s prohibition decision against Google’s Android mobile operating system.

There, EU officials hit Google with a 4.34 billion-euro fine for using the Android licensing terms to ensure its own apps were pre-installed in the best positions, giving its own services an unfair advantage in the mobile eco-system over rivals.

“In the interviews that ACM has conducted for this market study, several app providers mentioned that competing with pre-installed apps by Apple and Google on their respective [operating systems] puts them in a disadvantageous position,” the ACM’s study noted, adding that such apps also supposedly benefited from better interoperability too.

There are also parallels between some of the concerns cited by the ACM with a probe by the German antitrust authority into Amazon.

There, officials have flagged issues over the lack of communication between Amazon and the third-party sellers that sell on its marketplace, in particular “the non-transparent termination and blocking of sellers’ accounts.”

App-makers also complained to the Dutch authority about Google and Apple lacking transparency and being hard to contact.

Dutch investigators will also no doubt also pay careful attention to a report ordered by the commission and presented earlier this month, in which professors recommended that the commission start considering dominant platforms — potentially including app stores — as “regulators” creating the rules and institutions through which their users interact.

“A dominant platform that sets up a marketplace must ensure a level playing field on this marketplace and must not use its rule-setting power to determine the outcome of the competition,” they said.

That echoes warnings in the Dutch report: “App stores are thus the entities guarding the selection for and presentation of apps to consumers.”

The question now is whether the Dutch regulator finds the playing field on the App Store is level or not. What it could do to redress any imbalance is an altogether different matter.

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