The UK's Competition and Markets Authority (CMA) initiated a public consultation on Tuesday, proposing to allow app developers to steer users towards payment channels outside of Apple and Google's app stores, aiming to lower fees and foster market competition.
The CMA stated that Apple currently completely prohibits developers in the UK from guiding users to bypass its payment system, while Alphabet (Google) has previously imposed certain restrictions on such practices. The proposed measures would eliminate these restrictions, enabling developers to communicate directly with users about alternative payment methods.
The Executive Director of Digital Markets at the authority emphasized that providing app developers and users with more choices for communication and transactions is crucial. This not only offers freedom of choice but is also the best way to introduce competition into a key area of the mobile ecosystem where competitive pressure is severely lacking.
The regulator clarified that any fees charged by Apple and Alphabet (Google) for steering behavior must be fair, reasonable, and lower than the current app store commission rates. The resulting savings should be passed on to consumers or reinvested in innovation. The CMA is also considering requiring Apple to open the iPhone's NFC (Near Field Communication) technology to third-party developers. This could potentially break Apple Pay's monopoly on tap-and-pay within the iOS ecosystem, allowing fintech companies to offer independent contactless payment solutions within their own applications.
Alphabet (Google) responded that it has already implemented changes aligned with the CMA's proposals, stating that new Play Store terms introduced this month allow developers to guide users to complete off-platform transactions under certain restrictions. Apple, however, argued that the proposed requirements would undermine security protections, opening the door to fraud and deceptive charges, and stated it would continue to clearly express its concerns to the CMA.
This consultation comes at a time when global regulators are conducting a historic reckoning on the fee structures of Apple and Alphabet's (Google) app stores. The European Union has already passed the Digital Markets Act, compelling both companies to open up to third-party app stores, and the U.S. Department of Justice has also launched antitrust lawsuits. The UK last year determined that Apple and Alphabet (Google) hold a strategic market status in the mobile market, granting authorities targeted intervention powers.
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