Apple has cautioned that proposed UK competition reforms aimed at breaking the grip of tech giants on app payments could lead to increased scams and undermine consumer protections. The CMA is consulting on rules that would allow developers to direct users to external payment options, a move intended to foster competition and lower prices.
The UK's regulatory push could set a precedent for other countries, potentially forcing major tech companies to alter their app store payment policies globally and impacting their revenue streams.
Apple has warned that proposed UK competition reforms for its App Store could 'open the door to scams,' as the Competition and Markets Authority (CMA) moves forward with plans to loosen the control tech giants Apple and Google have over in-app payments.
The CMA on Tuesday initiated a consultation on new conduct requirements under the Digital Markets, Competition and Consumers Act. These rules would compel Apple and Google to permit developers to guide users toward payment options outside of their respective app stores. This initiative is intended to dismantle 'anti-steering' rules that currently prohibit or limit developers from promoting less expensive payment methods that bypass Apple's and Google's commission fees.
In response, an Apple spokesperson stated that the proposals would compromise consumer protections. 'Through the App Store, we strive to ensure that apps are safe, transactions are secure, and users are protected,' the spokesperson said. 'Steering requirements undermine that foundation, opening the door to scams, bait-and-switch tactics, and the circumvention of parental controls.' The company emphasized that users lose protections when directed away from Apple's payment infrastructure and pledged to continue voicing its concerns to the CMA.
A Google spokesperson commented that the company has already implemented the changes the CMA is proposing. The regulator believes that granting developers greater flexibility in payment processing will foster increased competition, reduce costs, and stimulate innovation within the UK's app economy.
CMA executive director for digital markets, Will Hayter, stated that the watchdog aims to provide 'both app developers and users more choice' in communication and transactions. He also noted that while compensation for Apple and Google's services is fair, any fees charged must be justified through a robust, evidence-based framework considering both costs and value.
This consultation follows sustained pressure from developers who argue that the commissions charged by Apple and Google, which can be as high as 30% on digital purchases, lead to inflated consumer prices and can be prohibitive for smaller businesses.
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