Apple's App Store faces significant overhaul in the UK as the Competition and Markets Authority (CMA) seeks to loosen the tech giant's grip on in-app payment systems. A proposed change could see app developers free to direct users towards cheaper payment options outside Apple's proprietary store, prompting fears that 'scams' and 'bait-and-switch tactics' will proliferate.
The CMA is consulting on new conduct requirements under the Digital Markets, Competition and Consumers Act, which would permit developers to inform users about potentially lower-cost payment methods that bypass commissions charged by Apple and Google. This move aims to weaken existing 'anti-steering' rules, currently restricting developers from promoting alternative payment options. The reforms could lead to increased competition in the UK's £6.3 billion digital economy, potentially benefiting consumers through reduced costs and stimulating innovation.
Apple has expressed strong opposition to these proposals, arguing that they would undermine consumer protections and 'open the door to scams'. A spokesperson stated, "Through the App Store, we ensure apps are safe, transactions secure, and users protected." They highlighted concerns that steering requirements could be circumvented by malicious app developers. In contrast, Google has already implemented similar changes to its payment policies.
The CMA believes that granting greater freedom over payment methods will foster competition, potentially leading to lower costs for consumers and driving innovation in the UK's vibrant app economy. Will Hayter, executive director for digital markets, is expected to stress that while Apple and Google are entitled to compensation, any fees charged must be "fair and reasonable", justified by robust evidence.
Apple and Google currently charge commissions of up to 30 per cent on digital purchases. App developers have long argued that these charges inflate prices for end-users and hinder smaller UK firms from competing effectively. The CMA's proposals also include requiring Apple to open access to its iPhone near field communication (NFC) technology, potentially paving the way for new fintech innovations.