Apple claims CMA app store shake-up could ‘open the door to scams’
Apple has claimed that proposed UK competition reforms to its App Store risk “opening the door to scams”, as the CMA prepares to push ahead with plans to loosen the grip Apple and Google hold over in-app payments.
The watchdog on Tuesday launched a consultation on new conduct requirements under Britain’s Digital Markets, Competition and Consumers Act that would force the tech giants to allow developers to direct users to payment options outside their app stores.
The move is designed to weaken so-called anti-steering rules, which currently prevent or restrict developers from advertising cheaper payment methods that bypass Apple’s and Google’s commissions.
Apple hit back ahead of the consultation, arguing the proposals would undermine consumer protections.
“Through the App Store, we strive to ensure that apps are safe, transactions are secure, and users are protected”, said an Apple spokesperson.
“Steering requirements undermine that foundation, opening the door to scams, bait-and-switch tactics, and the circumvention of parental controls.”
“When users are directed away from Apple’s trusted payment infrastructure, they lose the protections they rely on Apple to provide. We will continue to make our concerns clear in our ongoing dialogue with the CMA.”
Meanwhile, a Google spokesperson said: “We have already made the changes that the CMA is proposing today.”
The regulator believes giving developers more freedom over payments will increase competition, lower costs and encourage innovation across the UK’s app economy.
Speaking later on Tuesday, CMA executive director for digital markets Will Hayter is expected to say the watchdog wants to give “both app developers and users more choice” over how they communicate and transact.
“While it is only fair for Apple and Google to be compensated for the services they provide, any fees they charge must be justified through a robust, evidence-led framework involving due reference to both cost and value,” he is expected to say.
Big tech app battle continues
The consultation follows months of pressure from developers, who argue Apple and Google’s commissions – which can reach as high as 30 per cent on digital purchases – inflate prices for consumers and make it harder for smaller UK firms to compete.
Under the proposals, developers would be able to direct customers to external payment systems, while any fees Apple and Google continue to charge for doing so would need to be “fair and reasonable”.
The CMA is also consulting on requiring Apple to open up access to its iPhone near field communication (NFC) technology, potentially allowing fintech firms to build their own contactless payment services directly into iOS apps.
The changes could pave the way for new digital wallets, account-to-account payments, stablecoin services and digital identity products to compete more directly with Apple Pay.
Apple argues its App Store commissions fund the infrastructure developers rely on, alongside fraud prevention, security and app distribution.
The company says it prevented more than $2.2bn (£1.6bn) in fraudulent transactions last year and that allowing users to leave its payment systems would weaken those protections. It also points to research suggesting developers rarely pass lower commission costs on to consumers through cheaper prices.