Key facts
- Apple claims UK competition reforms for its App Store risk enabling scams.
- The CMA is consulting on rules to allow developers to direct users to external payment options.
- These reforms aim to weaken anti-steering rules that restrict developers from advertising cheaper payment methods.
- Apple argues these changes would weaken consumer protections and parental controls.
- Google stated it has already implemented the proposed changes.
- The CMA also considers requiring Apple to open NFC access for third-party payment services.
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, is expected to state that the watchdog aims to provide "both app developers and users more choice" in communication and transactions. He is also expected to note 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 create barriers for smaller UK businesses. The proposed changes would allow developers to direct consumers to external payment systems, with any fees imposed by Apple and Google for this service needing to be "fair and reasonable."
Furthermore, the CMA is consulting on requiring Apple to grant access to its iPhone's near field communication (NFC) technology. This could enable fintech companies to develop their own contactless payment services directly within iOS applications, potentially leading to new digital wallets, account-to-account payments, stablecoin services, and digital identity products that could compete with Apple Pay.
Apple maintains that its App Store commissions fund the necessary infrastructure for developers, as well as fraud prevention, security, and app distribution. The company reported preventing over $2.2 billion (£1.6 billion) in fraudulent transactions last year and suggested that allowing users to bypass its payment systems would weaken these safeguards. Apple also cited research indicating that developers rarely pass on lower commission costs to consumers through reduced prices.