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Who wins when governments clash with technology giants – and for whom do we root?
We are getting a small test of that question in the Netherlands. Last year, the U.S. The Dutch equivalent of the Federal Trade Commission became one of the first regulators in the world to require Apple to give people multiple payment options for using dating apps on their phones. Apple has had a small crack in its full control over iPhone apps since 2008.
This has now become a standoff between the world’s most valuable company and Dutch bureaucrats. Apple has proposed a solution, but regulators have called Apple’s stance “regrettable” and imposed a weekly fine of a total of 25 million euros (about $ 28 million). Apple says the security and convenience of iPhone owners will be compromised if it allows this, but it also says the company is fulfilling its legal obligations.
I don’t usually pay attention to relatively small regulatory beef, but the company is fighting as if it’s a big deal. Apple’s response also reveals how tech superpowers respond to government efforts to change the role of technology.
More and more powers everywhere in the world – in both democracies and dictatorships – want tech companies to change what they are doing. The tech giants say they obey the law wherever they operate. But they also retreat against governments and distort or shape laws and regulations. And it is not always easy to tell the difference between justifiable disobedience and corporate liberation.
Proponents of democracy, for example, have criticized Facebook, Twitter, Apple and Google for not doing enough to push back against government efforts to censor political speech in countries such as Vietnam, India and Russia. After the mass shootings in San Bernardino, California in 2015, and in Pensacola, Fla., In 2020, Internet promoters praised Apple for refusing to help the FBI smash the killers’ iPhones.
The Netherlands became the scene of an improbable high-stack tech battle starting in 2019, when the Authority for Consumers and Markets began investigating whether Apple’s app storefront had violated the country’s laws against abuse of power.
The broader issue is the same that Apple is facing everywhere between Fargo, ND, Seoul and many of the world’s capitals and courtrooms. Some authorities and developers say Apple unfairly controls our smartphone and digital economy by requiring us to download iPhone apps through its App Store. There, the company sets rules about what materials are appropriate and charges a commission of up to 30 percent on some purchases.
App developers, including Match Group, a US company that owns Tinder, Match.com and other dating services, used Dutch investigations to spread their complaints about Apple. Match wanted more options around Apple’s store to direct people to pay for dating services.
In August, ACM issued an order banning Apple from using dating apps only in the company’s payment system, enabling Apple to charge a fee. It may not look like much, but the Netherlands could be one of the first to dominate Apple’s grip on the app economy.
In response, Apple last month proposed a set of conditions that some app developers said were in defiance of the Dutch regulator. Apple has essentially stated that dating apps in the country can use any payment system they want, but Apple will charge a fee of 27 cents for every dollar purchased by people in the app, and dating companies need to provide information and audits. That
Try to imagine what Walmart says shoppers can pay the way they want, but it can cost more if you use a non-Walmart credit card and you have to give your card a monthly statement to Walmart.
People who keep a close eye on Apple have said that its approach in the Netherlands is probably a blueprint for other cases in which judges or regulators try to force the company to do what it does not want to do with its App Store.
The regulator says Apple’s new terms do not comply with the ACM order. “Apple’s so-called ‘solutions’ continue to pose a number of hurdles for dating-app providers who want to use their own payment system,” ACM said in a statement Monday.
A court in the Netherlands will have to resolve a dispute with Apple. All regulation is slow and complex, but the controversy shows that there may be more people involved in deep-pocket tech companies. The question now is whether Apple will fight its current and future efforts to replace its app store with the vibrancy of its app store in the Netherlands – and if it does, we will be better off.